Property tax on homes revoked in Hungary

2010-02-04

The Hungarian Constitutional Court has ruled that some elements of the tax law on high-value residential properties (worth more than HUF 30m, €0.1m) introduced at the beginning of January 2010 were unconstitutional.
The court withdrew the tax law with retroactive effect two weeks later. The most problematic issue involved the rateable value (base value), as it was unclear how and when the value of the property should be calculated and it was the responsibility of the taxpayers to estimate the tax payable on their residential property.
In addition, property owners were to have borne the cost of an eventual property revaluation by the fiscal authorities. The law would thus have given unlimited power to the tax office to settle the amount of tax due, which would have violated the principle of legal security.
The government had expected the property tax to generate revenue of HUF 50bn (€170m) in 2010.