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Hungary: Proposed temporary reduction of VAT rate of 5%, residential units

Hungary: Proposed temporary reduction of VAT rate of 5%

A bill introduced by the Hungarian government would amend the value added tax (VAT) law to provide that effective 2021, the rate of VAT on certain dwellings would be 5%.


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Eligible residential units (either to be built or already existing in a multi-unit residential building with a total net floor space not exceeding 150 square metres) generally would qualify for the 5% rate of VAT.

The VAT rate of 5% would also apply to detached houses having a total net floor space not exceeding 300 square metres.

The reduced VAT rate would be effective 1 January 2021 and would apply through 31 December 2022.

Read a November 2020 report prepared by the KPMG member firm in Hungary

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