Introducing the first Hungarian town to restrict property purchases: Discover who they’re aiming to keep out

Hungary’s Parliament recently passed a law granting municipalities the authority to decide who can move into their communities—empowering them to accept or limit new residents. Mezőkeresztes, a small town in north-eastern Hungary, is the first in the country to apply this new provision, which allows the local government to intervene in any property sale and purchase the property itself under the same terms as the intended buyer. Critics argue that the measure could be aimed at a specific ethnic group.

Restricting property sales: political suicide?

There is no denying that certain locations—such as the suburbs of Budapest or the area around Lake Balaton—are grappling with serious issues stemming from an increasing number of newcomers. Whether they are Hungarian, foreign nationals, permanent residents, or temporary workers living in rented accommodation, these towns are overwhelmed by the strain on local infrastructure, the shortage of nursery school places, overcrowded kindergartens, and even a lack of drinking water. From this perspective, allowing local governments to impose conditions on new residents might appear to be common sense.

However, prior to the adoption of the law, several mayors expressed concerns and stated they had no intention of implementing the new regulations, fearing public backlash. Some noted that, for most Hungarian families, real estate is their only major asset—meaning any policy that lowers property values (as restrictions on property sales are likely to do) could amount to political suicide.

• Rental prices in Hungary have surged again, with another spike expected due to the return of college students

Local government granted pre-emptive purchase rights

Although several towns near Lake Balaton expressed interest in leveraging some of the law’s restrictive provisions, it was the local council in Mezőkeresztes, Borsod-Abaúj-Zemplén County, that acted first. Under the new regulation, all property sale contracts must be submitted to the local municipality, and the town’s Financial and Economic Committee will decide whether the buyer may proceed or if the municipality will exercise its right to purchase the property under the same terms.

According to a report by G7, Mezőkeresztes is not facing overpopulation—the town’s population has consistently declined, as has the number of annual property transactions, which have fluctuated between just 3 and 15 per year since 2015. Property prices remain low despite the town’s proximity to Mezőkövesd, known for its thermal baths, and the M3 motorway.