The wealth tax planned for 2027 may create new tax and administrative obligations for high-net-worth individuals and business owners. Under the draft currently available, the portion of net wealth exceeding HUF 1 billion would be subject to an annual tax of 1% (and 1.5% on the portion of net wealth exceeding HUF 100 billion), with the first valuation date falling on 31 December 2026. Although the rules may still change, those potentially affected should consider starting their preparations now.

The first task: mapping all assets

The wealth tax would not apply solely to property or cash held in bank accounts. The tax base may also include shareholdings, securities, overseas assets, cryptoassets and high-value movable assets, among other items.

The first step is therefore to prepare a detailed asset inventory covering domestic and overseas assets, ownership arrangements and associated liabilities. Reviewing tax residence is particularly important, as this may determine which countries' assets must be taken into account.

Valuing shareholdings is a key issue

For business owners, a substantial proportion of their wealth often consists of their interest in their own business rather than readily available cash.

Valuing shareholdings may therefore be one of the most complex tasks. Businesses must be valued in accordance with the rules set out in the draft, which may produce a figure significantly different from the owner's estimate of market value. More complex corporate structures, holding companies and asset management arrangements may require a separate analysis.

It is advisable to begin gathering the financial information, financial statements and other documents required for these valuations in good time.

Preparing for the financial impact of the tax

One characteristic of the wealth tax is that it may create a payment obligation in respect of assets that generate no regular income. A valuable business interest or property portfolio, for example, may give rise to a substantial tax liability even where the owner does not have sufficient liquid funds available.

Alongside estimating their expected tax liability, those affected should therefore also plan how it will be funded.

Wealth planning and succession: reviewing existing plans

The introduction of a wealth tax may add a new consideration to family wealth planning, succession and the design of business ownership structures.

It is important to recognise, however, that transferring assets to a company or a fiduciary asset management arrangement does not in itself provide an automatic exemption from wealth tax. The proposed anti-avoidance provisions must also be taken into account, so restructuring assets solely to achieve tax savings should not be regarded as an appropriate solution.

Those who had already decided to undertake succession planning, restructure their business or organise family wealth for the long term should nevertheless review those plans in light of the expected tax environment.

How can Niveus help?

Preparing for wealth tax involves more than calculating a tax liability. Compiling an asset inventory, valuing shareholdings, analysing ownership structures and assessing the potential tax consequences may require input from several disciplines.

Niveus's tax, legal, business valuation and transaction advisory specialists provide comprehensive support in assessing wealth tax exposure, identifying critical issues and planning the necessary preparations.

The immediate priority is to establish precisely who is affected, the likely tax burden and the preparations required, rather than to restructure assets immediately.

Further information on preparing for wealth tax and Niveus's services:

Wealth tax 2027 – preparation and wealth planning