BREAKING – Hungarian Parliament passes laws on property buying restrictions, cash use and windfall profit taxes

The Hungarian Parliament has passed a new law that empowers local municipalities to restrict who may acquire property in, and move into, their towns. A total of 141 MPs voted in favour, while 41 voted against the regulation. In addition, Parliament adopted several other pieces of legislation, including one making the use of cash a constitutionally protected right, as well as a law formalising the so-called windfall profit taxes.

New law on property buying restrictions adopted

According to 24.hu, the Hungarian Parliament passed Regional Development Minister Tibor Navracsics’s so-called “Local Identity Act” (Önazonossági törvény) this afternoon. The new legislation gives municipal councils the power to restrict property purchases and prioritise local residents in such transactions.

Local governments will be allowed to restrict property purchases and usage by foreigners and non-residents. The only exception to this rule is arable land. According to the Ministry, the law will help local residents preserve the unique character of their town or village, enable young people to stay in their hometowns due to lower property prices, and curb mass immigration to areas such as Lake Balaton or Budapest, where public services—such as crèches and kindergartens—are struggling to cope with the rapidly increasing population.

Under the new law, municipal councils may determine who is permitted to move into the town or village and what conditions they must fulfil (e.g. contributing to the extension of utility networks). Councils may even stipulate that newcomers are not allowed to register a residential address in the settlement.

• Popular Balaton town considers limiting property purchase: others may follow, read more HERE

New law safeguards use of cash

MPs also voted on amendments aimed at ensuring that cash remains a viable payment option amid the expansion of digital payments. The legislation—passed with 143 votes in favour, 7 against, and 31 abstentions—amends existing acts on consumer protection, commerce, services, and the sale of farmland to guarantee the option of cash transactions.

• Mass protest in Budapest: Tens of thousands rally against Orbán government

Parliament codifies windfall profit taxes introduced during state of emergency

MPs have also voted to enshrine into law the windfall profit taxes that were initially introduced under state-of-emergency provisions. The legislation—which formalises taxes on banks, oil companies, and retailers—was approved by 127 votes in favour, 46 against, and 7 abstentions.

The law also includes an increase in the VAT exemption threshold from HUF 12 million to HUF 18 million in annual revenue, effective from 1 January. Additionally, it raises the tax allowance for companies engaged in joint R&D projects with universities.