Would you move to this Hungarian town? You’ll have to dig deep — newcomers must pay to settle in!
From November, Balatonföldvár will be among the first towns to make use of the new Identity Act, requiring property buyers to pay 2% of the purchase price to the local council if they wish to move there.
Purpose of the “settlement contribution”
According to the local decree, revenue from this “settlement contribution” will be used for maintaining public spaces, parks, green areas and roads, and for preserving the town’s overall tidiness, HVG reports. The local council justifies the move as part of “protecting community values and the traditions established by the Széchenyi family.” The regulation takes effect on 5 November.
The council says its intention is not to discourage newcomers but to introduce a financial contribution aligned with community expectations. The fee amounts to 2% of the property’s purchase price, meaning those buying a home or holiday house for around HUF 107 million (EUR 275,000) must pay an additional HUF 2.1 million (EUR 5,400) to the town hall.
Those purchasing property with state subsidies or a preferential housing loan, however, are exempt from the rule.
Pre-emption rights and penalties also included
Under the new regulation, not only the municipality but also local residents will have pre-emption rights. If the mayor believes a property could serve a public purpose (for instance, providing housing), the matter will be brought before the local council.
Those who fail to comply with the decree may face penalties for “unlawful settlement.” The fine is set at 0.2% of the property’s purchase price, meaning HUF 200,000 (EUR 513) for a HUF 100 million (EUR 257,000) home.
Legal experts raise concerns
According to HVG’s analysis, Balatonföldvár’s example could spark legal disputes. Under the Identity Act, municipalities may only use in rem legal instruments, such as pre-emption rights, for protection. Introducing a personal legal instrument such as a settlement fee is only permissible when establishing residence registration. By tying the payment obligation to property acquisition, the town’s decree may therefore contradict the literal interpretation of the law.
Government offices have yet to issue official statements, but investigations are ongoing. If they find legal violations, municipalities will be required to amend their decrees, or the offices may initiate supervisory proceedings to ensure compliance.
More towns seek to limit relocation
Balatonföldvár is not an isolated case. Since the adoption of the Identity Act this summer, several municipalities have introduced similar restrictions on newcomers.
In the Nógrád County village of Vizslás, for example, only those with at least a secondary school qualification, a clean criminal record and a valid tax clearance certificate may move in — and they must also pay a 10% settlement contribution, Telex reported. Similar regulations have emerged in Taktaharkány and Kiskunhalas, although in some places, such as Mezőkeresztes, local decrees were withdrawn after review by the county government office.
Critics argue that such measures may constitute covert discrimination and conflict with the law’s emphasis on protecting human dignity. Nevertheless, a growing number of rural municipalities are attempting to preserve their “local identity” in this way — even as the legal battles are only just beginning.