Secret changes to Hungary’s residency scheme: What they mean for investors!
Hungary has recently been facing significant housing challenges, a fact acknowledged by the government itself. The new resettlement programme was scheduled to commence on 1 January 2025, but substantial changes were discreetly introduced towards the end of the year.
According to Telex, the original scheme would have allowed wealthy foreign investors to purchase property worth €500,000 in exchange for a residency permit. However, the option to buy property was removed from the programme, leaving only two alternatives: either to purchase shares in a fund manager approved by the National Security Agency or to make a €1 million donation to a university foundation deemed to serve the public interest.
International competition and the limitations of the Hungarian scheme
For investors from outside the European Union (EU) and the European Economic Area (EEA), the Hungarian programme is less attractive than similar initiatives in other countries. Many locations offer more favourable conditions, such as lower investment thresholds, greater legal certainty, and better-reputed programmes.
Greece and Portugal are particularly popular destinations for investors, although the latter has also tightened its rules in response to rising property prices. In Hungary’s case, the loss of the option to purchase property and the reputational issues associated with the previous resettlement bond scheme make it challenging to attract investors.
One of the two remaining options under the scheme is to purchase a share from a qualified real estate fund manager. However, there is currently only one fund manager: Sprint Asset Hungary Ltd. This company, established in 2024, has not yet garnered significant interest due to its limited track record.
Other fund managers are attempting to obtain licences but face considerable difficulties owing to the complexity of the process and national security investigations. Many applicants have withdrawn their submissions because the licensing system is often convoluted and has numerous requirements.
Criticisms and structural problems of the scheme
The removal of the option to purchase property has made the remaining alternatives less appealing to investors. For instance, the €1 million donation requirement represents a far less tangible investment compared to acquiring property. Additionally, several provisions in the regulation fail to enhance the scheme’s attractiveness. For example, funds are required to allocate at least 40% of their investments to existing housing, which does not incentivise the development of new housing. Many experts suggest this rule may be amended in the future.
The only currently licensed fund manager, Sprint Asset Hungary, is a Chinese-owned company that was previously involved in the resettlement bond scheme. However, the fund’s operations are limited at present, having only received the necessary permits at the end of the year. While the fund manager and its partners are actively working to attract clients, market scepticism regarding the scheme’s success remains high.
International examples and lack of competitiveness
Residency programmes in other countries are often simpler, more affordable, and safer for investors. The Hungarian system involves higher entry costs and greater administrative burdens, despite offering the advantage of free movement within the EU. For many investors, purchasing property directly is a more appealing option than investing through funds, further reducing interest in the Hungarian scheme.
Although the programme is currently yielding disappointing results, many are optimistic that interest will increase in the future. Simplifying the licensing process, revising regulations, and improving transparency could help make Hungary more attractive to foreign investors. However, the present challenges highlight Hungary’s shortcomings in international competitiveness. Without a comprehensive overhaul of the programme, it will be difficult to position the country as a viable alternative.
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Hmmm. There goes, “Give me your tired, your poor, your huddled masses yearning to breathe free”.
That’s an American thing, not Hungarian
Hungarian university foundations are Fidesz controlled slush funds. It’s no surprise that you can get a residency permit by donating 1 million euros to them. These universities were cut off from EU funding for a reason. The foundations are controlled by Fidesz politicians with conflicts of interest and they are given indefinite reappointments.
What is FACT, the “corruption”, the control of the Orban led Fidesz Political Party in Hungary, in scheme’s and “other” referred in this article, and contribution by commentators, falls under AGAIN, highlighting FACT – the widespread and broadness, of the Toxic Cultures – that are the CORE practices of the Orban led Fidesz Government.
WHY – with the state of Hungary, in the phase of capitulation through its Economic & Financial collapse, plus other factual examples, that are DANGEROUS or of HIGH Risk, why would you consider making INVESTMENTS into Hungary ???
The propulsion of the population, the growing numbers of Hungarians, from “all stations in life”, in our cities, towns, villages and “hamlets” – coming to or arriving already at, the realization, the “Heinous” conduct, over the past 16 years, under the Orban led Fidesz Government of Hungary, they have been Governed, that HAS resulted in Hungary, being DELIVERED – to the eruptive place, near on collapse we are to-day.
Facts & EVIDANCE – keep PILING up.
High property prices are the reason why the real estate option is not available. Locals have been priced out by foreigners.
“to purchase a share from a qualified real estate fund manager” for how much?
There is only a “housing crisis” because everyone wants to live in fricken’ Budapest and maybe one or two other bigger towns. No-one wants to stay in the country.
Surely instead of finding way to cram everybody into the 2-3 cities, it would behoove to encourage people to stay in the less urban areas.