BUDAPEST: Hungary has been actively pursuing pro-family policies aimed at increasing birth rates and supporting families. In February 2025, Prime Minister Viktor Orbán announced significant changes to the tax system, introducing income tax exemptions for mothers with two or three children and capping housing loan interest rates at 5% starting in April.

New Tax Exemptions in Hungary

As part of the announced reforms, mothers with three children will be exempt from income tax starting in October 2025. For mothers with two children, the exemption will be phased in gradually from January 2026. This expansion builds upon existing tax benefits that already provided exemptions for mothers with four or more children, effectively exempting them from income tax.

Other Forms of Family Support in Hungary

Hungary’s pro-family policy includes various other forms of support, such as:

• Tax Allowances Based on the Number of Children: Families with one child can reduce their tax base by HUF 66,670 per month, those with two children by HUF 133,330 per child per month, and those with three or more children by HUF 220,000 per child per month.
• Support for Newlyweds: Newly married couples receive HUF 5,000 per month jointly for 24 months after marriage.
• Subsidies for Car Purchases: Families with three or more children can receive a subsidy of HUF 2,500,000 for purchasing a seven-seater car.
• Additional Vacation Days: Parents of one child are entitled to 2 extra vacation days, those with two children to 4 days, and those with three or more to 7 days.
• „Köldökzsinór” Program: Financial support for Hungarian families living abroad, including a one-time childbirth allowance and a so-called „baby bond.”

Family Housing Allowance (CSOK)

Introduced on July 1, 2015, the Family Housing Allowance (Hungarian: CSOK – Családi Otthonteremtési Kedvezmény) offers non-refundable financial support for marriages, partnerships, and single parents raising one or more children. The amount of support depends on the number of children raised and ranges from HUF 600,000 (approximately €1,550) to HUF 10,000,000 (approximately €25,845). For families raising three or more children, an additional preferential loan of up to HUF 10,000,000 is available.

Preferential Housing Loans

In addition to non-refundable grants, the Hungarian government offers preferential housing loans. For example, the NHP Zöld Otthon Lakáshitel (Green Home Loan) program allows obtaining a loan with an annual interest rate of 2.5% for the construction or purchase of a new, energy-efficient apartment or house.

Summary

Hungary is introducing increasingly extensive tax allowances for families, aiming to increase birth rates and counteract population decline. Poland also offers family allowances; however, they are not as far-reaching as in Hungary, where mothers with two or more children will be completely exempt from income tax. Both countries strive to support families but apply different approaches and scopes of support within their pro-family policies.

CER Law & Politics >> RTW >> Photo source: Victor Orban FB >> 19.03.2025