Hungarian Govt. Tables Plans for New €250,000 Real Estate-Based Golden Visa

On the 14th of November, Prime Minister Viktor Orban’s government submitted a draft law that aims to regulate third-country national immigration to Hungary.

Should the law pass as currently articulated, it would introduce a new Hungarian residency by investment program dubbed the Guest Investor Program (GIP).

Parliament will discuss the legislation before voting on it. Contrary to what many media outlets have shared, Parliament has not approved the draft yet, but the ruling party has an absolute majority of seats in the national assembly, which means the law’s passing is a highly likely outcome.

If the draft does pass the parliamentary vote, it will go to the President’s office for promulgation and become official legislation.

While the law is still subject to changes during this process, veteran investment migration specialist and Hungarian national Laszlo Kiss of Discus Holdings believes that material alterations to the bill are unlikely.

“The bill is massive,” remarks Kiss. “It deals with all immigration channels for third-country nationals, and its main focus is on worker immigration in response to the worker shortage for the new battery plants being opened by the Chinese in Hungary. The investor program is but a small part of the bill, and, of course, there is a probability we will see some changes, but I do not think it is likely.”

Kiss highlights that the President’s party has an absolute majority in Parliament and that, because this is an urgent matter centered around a flagship issue for the current government, we “can expect a quick resolution.”

While many media outlets have already announced the introduction of the GIP, the program is will not open until late next year.

As stipulated in Point (1), Subsection 151 of Section 278 of the draft bill, the law concerning the GIP will enter into force on the 1st of September, 2024. 

The GIP is an entirely new program, not a reshaping of the previous Hungarian residency by investment program, which was suspended in 2017.

Kiss points out that introducing this new law will “effectively close” the old program since “this new legislation supersedes the old program’s suspension, and will hence render the previous program obsolete.”

Terms of the new Guest Investor Program

The GIP will award successful applicants with a “guest investor visa” valid for two years, during which period they can obtain a ten-year residency permit, renewable for a further ten years as long as its holder maintains the investment.

To qualify under the program, an applicant must:

• Invest EUR 250,000 in investment certificates issued by a real estate fund registered with the National Bank;
• Invest EUR 500,000 directly in Hungarian residential real estate (free of encumbrances or claims);
• Donate EUR 1 million to an institution of higher learning to support educational, scientific, artistic, or creative activities “maintained by a public interest trust foundation performing a public task.”

The draft law does not include in-depth details about investment restrictions under the GIP. It is not clear whether it will operate on an open market system or if the government will limit investment options, particularly real estate investments, such as in other programs like the Caribbean and Turkish CIPs or like Portugal’s Golden Visa in the past.

Kiss acknowledges that there remains “a lot to discover, especially the procedural and documentation aspects of the program.” 

Since the law would only come into effect in September of 2024, the government has “ample time to share all the details,” according to Kiss.

The law does not mention any physical residence requirements to maintain the residency permit, another issue that requires more clarification.

Kiss clarifies that the ten-year residence permit is not a permanent residency. That, however, may be a good thing, he says, because “tax liability differs a lot depending on whether you have a permanent or temporary residency. I have operated a tax and wealth advisory company for years, and I can tell you that, depending on the situation, a long-term residency like this one may prove much better in a taxation sense.”

Whether the GIP will operate on a Greek Golden Visa module, only tying the residency validity to the investment, remains to be seen. 

The Hungarian Parliament appointed a committee to conduct a “detailed discussion” of the law today and has set a deadline on the 20th of November to announce the results.