Economy 30 September 2021, 1:30pm

Hungary presents gorgeous gift: HUF 42 million + HUF 73 million family support

Portfolio

With the announcement of details on the Green Home Programme and the green family housing allowance (CSOK), the family support system for the coming period has been completed, offering more support to families than ever. According to Portfolio’s calculations, couples planning three children can receive up to HUF 42 million in non-refundable grants and HUF 73 mn in subsidised loans for buying a HUF 100 mn property over the years, subject to income and creditworthiness as detailed below. For two children, the figures are HUF 20 mn and HUF 80 mn, and for on children HUF 13 mn plus HUF 83 mn. The following is an outline of the amounts available from October.

The high-amount forms of family support available to Hungarian families this year, old and new, include:

The Family Housing Allowance (CSOK), introduced in 2015 and expanded in scope in 2016, along with the 3% subsidised CSOK loan also available.
The mortgage and student loan waiver scheme launched in 2018 and expanded in 2019.
The 0% interest prenatal loan, the village CSOK and the subsidy on new cars for large families, launched on 1 July 2019.
The home renovation programme started on 1 January 2021 and the 3% subsidised renovation loan available since 1 February.
The VAT reclaiming and fee exemption for CSOK applicants, also since 2021, and the CSOK offered for rebuilding attics or adding new levels.
The Green Home Programme available form 4 October and the green CSOK loan offered as part of it. Similar to the original CSOK, it is capped at HUF 10 mn for two children and HUF 15 mn for three, but cannot be taken simultaneously with the ”regular” CSOK.

The Green Home Programme offers up to HUF 70 mn in 25-year loans for newly built energy-efficient properties, at 0% interest for up to HUF 15 mn and 2.5% for the remaining HUF 55 mn.

With an estimated HUF 297,000 in monthly instalments, the maximum amount could be available to households with net income of more than HUF 500,000.

Meanwhile, non-refundable grants and subsidies can help finance some or all of the co-payment. Of course, combined with the other loans discussed in the present article, the actual net income required could be well above HUF 500,000, even though some of those loans could become non-refundable such as the prenatal loan. The numbers laid out below represent a theoretical maximum for most households, but certain details of these examples could also prove useful in themselves.

As a general rule, only married couples are eligible for support in advance (CSOK before childbirth, prenatal loan), while the others are open to single or divorced parents as well.

The amounts mentioned in the lead are accessible to those who are just starting a family. However, there are major differences among the various forms of support as to which children are covered (although as a rule of thumb, foetuses after the 12th week count as children for these purposes).

The CSOK, the village CSOK, and the related subsidised loans are offered after children under 25 and to planned yet-unborn children to families moving into new homes.
The mortgage and student loan waivers are only available after newly born children, but the amount is calculated including existing children. Both require two children at least.
Forms of support related to the prenatal loan are available to those with at least one child on the way within five years. These include 0% interest until maturity, waiving 30% of the debt if a second child is born and 100% of it after a third one, and allowing a three-year break in payments after each child.
Renovation subsidies and the related subsidised loans and the grants for large families buying new cars are only available after existing children, requiring one and three children, respectively.

Deadlines should also be kept in mind: CSOK can be claimed within 180 days of buying a new home; the prenatal loan can only be taken out before childbirth; while renovation subsidies must be applied for no more than 60 days after the last invoice is paid. The deadline for applying for a break in repaying prenatal loans is 60 days after childbirth or adoption, although this was extended during the lockdown. The same 60-day deadline applies for mortgage waivers in the case of children born or adopted after 30 June 2020.

Let us see the above in sums and charts depending on the number of children, beginning with families with three or more children who are eligible for all forms of family support. Of course, not all of these are available in advance or at once and can have requirements regarding the number of children in total or require newly born children.

The system is much less generous to those with two children, who are eligible for smaller amounts of CSOK and CSOK loans as well as mortgage and student loan waivers, are only waived 30% of the prenatal loan and are excluded from car subsidies. Meanwhile, home renovations subsidies are the same regardless of the number of children.

Families with a single child, or those planning just one child, are eligible to a much narrower range of support. The CSK is capped at HUF 600,000, there is no CSOK loan, no mortgage and student loan waivers, and while the prenatal loan remains interest-free in the case of a child coming within 5 years, the full amount must be repaid. However, the renovation subsidy and loan is available to single-child families as well.

No children are required for the 2.5% HUF 70 mn Green Home Programme loan, although the 0% green CSOK loan is only available to those with two (up to HUF 10 mn) or three children (up to HUF 15 mn).

Finally, let us look at how a couple just about to start a family can maximise family support. All three example (1, 2 or 3 children) assume buying a HUF 100 mn new home that will function as a first abode (this is relevant because of a 4% fee). The mother has remaining student debt of HUF 2 mn. As renovation subsidies and loans are also available for recently bought new homes (e.g. for fence building, solar panels, etc.), we also included these in the table. As for the prenatal loan, we calculated with the first child already being on its way and the other(s) planned within three years, as this offers the highest total.

Over the years, promising and delivering three children can be worth up to HUF 42 mn in non-refundable government subsidies and HUF 73 mn in subsidised loans. As shown below, only a part of this amount is available before buying the property.