Hungary plans new wealth tax targeting assets over 1 billion forints

The Hungarian government is planning to introduce a new wealth tax starting in January, targeting individuals with private assets exceeding 1 billion forints. While the initial plan focused on a 1 percent annual tax, Prime Minister Péter Magyar suggested during a public forum that the tax could become progressive, potentially imposing rates higher than 1 percent on assets exceeding 500 billion forints.

Experts, including those from KPMG, have raised concerns regarding the practical implementation and valuation of assets. While financial instruments like bank accounts and listed stocks are easily assessed, valuing real estate, vehicles, private company shares, and luxury items such as art or wine presents significant challenges. The complexity of determining market value and ensuring accurate self-reporting could lead to administrative difficulties and unintended economic consequences.