Hungary Implements Lifelong Income Tax Exemption for Mothers with Three or More Children

New Tax Exemption Takes Effect

A significant new income tax exemption for mothers raising three or more children officially took effect in Hungary on October 1, 2025. This policy grants a lifelong exemption from personal income tax to eligible mothers, regardless of their age or whether their children are still minors or adults. The measure is expected to benefit approximately 250,000 mothers across the country.

The Ministry of Culture and Innovation announced the change, with State Secretary for Families Zsófia Koncz highlighting its potential impact. For instance, a mother earning 300,000 forints a month could retain an additional 45,000 forints, while someone earning 600,000 forints could save 90,000 forints. Mothers earning the national average salary could see an increase of over 100,000 forints monthly, accumulating to more than one million forints annually. According to the Oeconomus Economic Research Foundation, this translates to an average monthly saving of 109,000 HUF (approximately EUR 280), totaling nearly 1.3 million HUF (EUR 3,300) per year.

Broader Family Support Initiatives

This latest exemption is a continuation of the Orbán government's extensive family policy, which previously introduced a lifelong personal income tax exemption for mothers with four or more children in January 2020. Prime Minister Viktor Orbán has described Hungary's family support program as the 'largest' in Europe, emphasizing its role in fostering a family-centered economy.

Minister of Culture and Innovation Balázs Hankó further detailed the financial benefits, stating that for a family with three children, the October income tax exemption provides 109,000 forints per month, or 1.3 million forints annually. From January 2026, the doubled family tax allowance will add another 99,000 forints monthly, bringing the total to 208,000 forints per month, or 2.5 million forints annually. When combined with existing benefits, families could see their monthly support reach 307,000 forints, or 3.7 million forints per year.

Aims and Future Expansions

The primary objective of these measures is to boost Hungary's birth rate and reverse the country's population decline, making having children a financial advantage rather than a burden. The government aims to allow families to retain more of their earnings rather than relying solely on direct handouts.

Further expansions to the family tax policy are planned:

• From January 1, 2026, mothers under 30 with one child will also become fully tax-exempt.
• Lifelong personal income tax exemptions for mothers with two children will be phased in, starting with mothers under 40 from January 1, 2026, followed by age groups 40-50 from January 1, 2027, 50-60 from January 1, 2028, and 60+ from January 1, 2029.
• Personal income tax on maternity benefits, such as the infant care allowance (CSED) and childcare fee (GYED), will also be eliminated.
• A two-stage increase in child tax allowances is also underway, with the first phase commencing on July 1, 2025, and the second on January 1, 2026.

To claim the exemption, mothers must submit a tax declaration to their employer or through the National Tax and Customs Administration's website. Those who file in October will see the higher salary in November, or the benefit can be claimed as a lump sum in the annual tax return.