Hungary increases social fuelwood funding and cuts VAT

The Hungarian government has announced significant measures to alleviate heating costs for households. Starting September 15, the Value Added Tax (VAT) on firewood and other solid fuels will be reduced from 27 percent to 5 percent. If retailers pass this full reduction to consumers, gross prices could decrease by approximately 17 percent.

Additionally, the government is doubling the funding for the Social Fuelwood Program. The support framework will increase from 5 billion forints to 10 billion forints starting from the 2026-2027 heating season. To ensure the 2026 application cycle, 4.46 billion forints will be reallocated from unused municipal salary and cost-reimbursement budgets.