Hungary Abolishes Real Estate Investment Option in Golden Visa Program

Hungary has become the latest European country to eliminate the real estate investment option from its Golden Visa Program, following Portugal’s lead. This decision, which prevents wealthy foreigners from obtaining residency by investing at least €500,000 in Hungarian real estate, was announced in the Hungarian Gazette on December 20.

The Golden Visa Program of Hungary, officially known as the Guest Investor Program of Hungary (GIP), currently offers two pathways to residency: investments of €250,000 in approved real estate funds or donations of at least €1 million to public education and cultural initiatives. The Guest Investor Program was launched on July 1, 2024, but the changes were implemented before January 1, 2025, when the real estate investment option was set to take effect.

Laszlo Kiss, Managing Director of Discus Holdings, explained to Imi Daily that the decision was driven by Hungary’s changing housing market conditions, emphasizing the strain on the housing market. Similarly, Armand Arton, President and CEO of Arton Capital, attributed the move to concerns over market stability. “Looking at the experience of other European countries who permitted unregulated real estate purchases, there were many cases of defrauding clients,” Arton said.

He further elaborated on the benefits of the fund-based investment structure, stating, “Allowing only the fund to invest in real estate is a much more regulated way for them to know which sector the fund will be investing in, if it’s residential or commercial.” He noted that programs in countries like Portugal, Greece, and Spain had faced challenges related to property market speculation, which negatively impacted housing affordability for local residents.

The introduction of Hungary’s GIP scheme in 2024 came six years after the country had abolished a previous Golden Visa Program amid allegations of corruption and money laundering. Hungary’s move aligns with efforts in other European nations to address housing crises and regulate investment programs.

Portugal, for example, recently removed the real estate investment option from its Golden Visa Program as part of its broader measures to manage the housing crisis, while still maintaining other pathways for Residency by Investment. Spain, however, has opted to terminate its program entirely. Meanwhile, Greece is focusing on attracting foreign investors through more productive ventures rather than real estate investments.

Hungary’s decision reflects a broader trend in Europe to reform or eliminate real estate-based Golden Visa schemes in favor of more regulated and sustainable investment options.

By fLEXI tEAM