Wealth Tax Advisory

Preparing for the new wealth tax obligations

The introduction of a Hungarian wealth tax will create complex tax, valuation and documentation requirements for high-net-worth individuals, families and wealth-holding structures. Under the draft legislation released for public consultation, the annual tax would apply to net wealth exceeding HUF 1 billion. Taxpayers would include Hungarian and foreign tax-resident individuals, assets held under trust asset management arrangements, private foundations and certain foreign wealth-holding structures. Hungarian tax residents would be required to take account of both domestic and foreign assets, while the liability of non-residents would primarily extend to Hungarian real estate, rights with a monetary value and interests in companies.

The tax base would be determined by deducting properly substantiated liabilities from the calculated value of taxable assets and applying a HUF 1 billion threshold. The rate would be 1% on the portion of the tax base up to HUF 100 billion and 1.5% on the portion exceeding that amount. As the tax would operate on a self-assessment basis, taxpayers may need to prepare a detailed asset inventory, update it annually and document the valuation methods applied. Different valuation rules would govern real estate, corporate interests, securities, receivables, crypto-assets and high-value movable property.

Under the draft legislation, the first tax liability would be determined by reference to the assets and liabilities existing on 31 December 2026. The first filing and payment deadline would be 31 August 2027.

Wealth tax advisory goes beyond calculating the tax

Determining the wealth tax liability requires the complete wealth position of the individual, the family and any relevant wealth-holding structures to be identified and assessed within a single framework. Ownership chains, matrimonial property arrangements, assets transferred to close relatives, and domestic and foreign investments may all affect the tax base. The valuation of holding structures and interests in unlisted companies can be particularly complex, potentially requiring analysis of equity, earnings capacity, hidden reserves and non-recurring profit or loss items.

Andersen’s wealth tax advisory service covers the entire process, from a preliminary assessment of tax exposure and preparation of an asset inventory to the valuation of individual assets and preparation of the tax return. Where assets are held internationally, we also examine the relevant foreign tax regimes, the individual’s tax residence and the extent to which foreign taxes imposed on wealth may be credited or otherwise recognised in Hungary. We assess wealth tax matters in conjunction with the client’s long-term wealth planning objectives, including the potential implications of trust asset management, asset management foundations, intra-family transfers of wealth and international investments.

Andersen services relating to wealth tax

• Preparation of an asset inventory: Identifying and organising domestic and foreign assets, ownership arrangements and properly substantiated liabilities.
• Review of matrimonial property arrangements: Determining which spouse should account for individual assets and in what proportion.
• Valuation of assets: Supporting the valuation of real estate, financial assets, receivables, movable property and other taxable assets.
• Valuation of corporate interests and groups: Company-by-company or group-level valuations, including the valuation of holding structures.
• Identification of hidden reserves: Identifying and quantifying differences between carrying amounts and relevant values embedded in real estate, corporate interests, securities and other assets.
• Review of non-recurring profit or loss items: Identifying and excluding non-recurring items that materially distort a company’s sustainable earnings capacity.
• Wealth tax assessment of intra-family transfers and business succession: Examining the tax and legal implications of transferring assets to close relatives, including the applicable statutory restrictions.
• Treatment of foreign real estate investments: Assessing the Hungarian and foreign tax consequences associated with acquisition, holding, use and disposal, including the availability of credit for foreign wealth taxes.
• Tax residence review: Analysing whether tax residence exists or changes and the resulting implications.
• Comparison of foreign tax regimes: Reviewing wealth tax, income tax and related rules in other jurisdictions with the involvement of Andersen’s international network.
• Review of domestic and foreign tax credits: Assessing whether local taxes, motor vehicle taxes and similar charges imposed on assets may be deducted or credited.
• Wealth tax calculation and return preparation: Calculating the tax base and tax payable, preparing the return and compiling the supporting documentation.
• Representation before the Hungarian tax authority: Assistance with data reconciliation, tax audits, valuation disputes, payment relief applications and appeal proceedings.