Hungarian gov't eyes radical turnaround in housing policy, with big changes in family allowances

Self-reflection

The renewal-slated housing subsidy scheme and its possible early results are intended by the government (and the ruling Fidesz party) as an important element of the 2026 election campaign, Telex reported on Tuesday. The 36-page preparatory material obtained by the news portal admits that:

• over the past 10 years, Hungary has become one of the most difficult countries in the European Union to access housing alternatives;
• many social target groups and family housing objectives are less or not at all addressed by current housing policy products;
• the Hungarian state needs to pursue a more active and determined policy of interventions in the housing market than hitherto, based on much more diverse housing solutions;
• greater state involvement for those, especially employed beneficiaries, whose lives have been affected by temporary or permanent shocks (e.g. divorce, death, physical or mental disability);
• in order to increase the propensity to start a family and to have children, the government needs to move away somewhat from the total dominance of demographic-based housing policy schemes;
• instead, the government should come up with innovative housing policy schemes and diverse housing support programmes;
• CSOK Plus is only available to families with a regular, above-average earned income and sufficient collateral; the subsidised CSOK loan available in small settlements does not include sufficient birth incentives; the baby loan is highly affordable even when one child is born (in fact, many have taken it out as an investment) and is fiscally wasteful (with a spending determination of up to HUF 200 billion per year).

New goals

The background paper sets the following goals:

• increase the number of housing starts to 25,000-30,000 from 15,000-18,000 per year;
• boost housing extensions, renovations and modernisation;
• increase housing investment expenditure as a share of GDP from 2.5% to 3% and then to 5% by 2035;
• launching large-scale service housing programmes, with the construction and renovation of 3,00 to 5,000 new service accommodation units per year,
• encouraging employers to reopen the fringe benefits system, so that at least 100,000 workers a year would benefit from the new housing element of the cafeteria;

• In Hungary, fringe benefits or non-salary compensation are regularly referred to as 'cafeteria', which should not be mixed up with a self-service restaurant. The various fringe benefits or cafeteria elements, which often involve targeted spending, are taxed differently from regular salary, where the employer pays social contribution tax on the gross salary, while the employee pays personal income tax and social security contribution. Instead, the employee receives net benefits, while the employer pays more taxes. However, the tax content of the fringe benefits is lower than the tax content of regular employment costs. The most well-known cafeteria element in Hungary is the Széchenyi Card (SZÉP card), which works very much like actual money, but sums sent there can normally be spent only on holiday accommodation, hot meals, and culture, managed in separate “pockets” of the card.

• introducing a shared ownership housing scheme: after paying part-ownership and rent, the beneficiary would acquire full ownership at the end of the "term";
• emancipation of young people: the proportion of young people receiving financial support from their parents would be reduced from 52% to 40% by 2035;
• introducing a financial product to encourage regular savings for housing: the state would provide a contribution of at least HUF 150,000 a year to encourage self-sufficiency in housing, with at least 50,000 people taking advantage of it each year;
• Increase the share of Hungarian suppliers: boost the participation of domestic construction actors to over 50%.

The priority would still be to increase GDP and fiscal revenues through the expected economic multiplier effect of the construction sector's recovery.

A few specific ideas

The document proposes, among other things:

• introduction of the Green CSOK Plus for the construction/purchase of a property with an energy rating of at least A+, with an even lower interest rate and a higher loan amount than the current one;
• launch of the CSOK Plus "introductory" scheme: ensuring cheap rental housing for five years for young people aged 18-30 who want to live together, on condition that they agree to apply for CSOK Plus afterwards;
• a broad mix of supply- and demand-side instruments in large industrial areas, for example by creating "regulated housing zones";
• the introduction of a housing agency model (although the paper notes that subsidising the rental of service apartments and maintaining property management services is expensive for the state);
• dormitory construction and development programme: the state would build at least 1,000 dormitories per year for the next ten years;
• market-based rental subsidies, preferential renting of community-owned flats/houses, mass renovation of substandard housing owned by the state or other organisations;
• optionally extend the interest-bearing period of the baby bond (the previous year's inflation + 3 percentage points), to allow for accumulation until the age of 25, in return for at least half of the savings being used to buy or build a home.

If Fidesz wants to boast of results already in the 2026 election campaign, it will have to allocate resources to the new tools in next year's budget, which is due to be prepared in early November, the portal concluded.

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