After four days of sunshine, rosé, and unusually warm weather for the May Day weekend, it’s tempting to stay in a blissful Balaton bubble. But Hungary’s legal and real estate drama doesn’t take holidays – and neither do I, apparently.

This is Part Four of my ongoing series on the country’s new Identity Protection Property Law. And unlike the last few posts, which focused on constitutional changes and legal theory, this one comes with a calculator. Because behind every vague political promise about “preserving community identity” is a real financial consequence – for buyers, sellers, developers, and anyone wondering how it will all play out.

If you’re trying to make sense of Hungary’s Property Law Impact on the economy, you’re in the right place.

If you’re just joining the saga:

• Part One introduced the new law.

• Part Two explained how local rules might work.

• Part Three tackled the legal minefield.

Today, we’re looking at where the law stands right now – and how it’s already reshaping Hungary’s property market before it even takes effect.

Where Things Stand as of 3 May 2025

Let’s begin with a quick update.

The 15th Amendment to Hungary’s Fundamental Law was passed in mid-April, giving municipalities the constitutional right to protect their “local identity.” This is what allows them, legally, to introduce restrictions on who can buy property or settle in their communities.

The implementing legislation — originally titled the Településvédelem Törvény (Local Identity Protection Act) — has now completed public consultation. The final draft was submitted to Parliament shortly after 24 April, and is expected to be passed in early May. The rollout date remains 1 July 2025.

The law has been softened since its original version. The most controversial clause — a full ban on property purchases by outsiders — has been removed. That idea received fierce criticism from economists, legal experts, and even mayors in regions that would be affected.

What’s still in:

• Pre-emption rights for local residents and municipalities (they get first refusal on property sales)

• Conditions for registering residency (e.g. proving family ties, local work, or other justifications)

• The right to introduce a local “settlement tax” or entry fee for new residents

• Purchase restrictions in designated zones that haven’t had new construction in the past decade

What’s out:

• The blanket ban on property acquisition by non-locals

So while the law is no longer as severe as originally proposed, it’s still significant — and investors have taken notice.

Hungary’s Property Law Impact on Prices and Buyers

The full law hasn’t passed yet, but the effects are already being felt.

Some buyers rushed to finalise deals before 1 July, but overall confidence has dipped. Properties are sitting longer, and agents are reporting a growing hesitancy — not because of market fundamentals, but because of legal uncertainty.

Several Budapest suburbs and Balaton towns have seen a noticeable spike in listings. According to Portfolio.hu and HVG, some areas reported a 10 to 15 percent increase in available properties. It appears some owners are trying to exit before their home becomes harder to sell.

One agent put it bluntly in an interview with Portfolio:

“Nobody wants to buy property they might not be able to sell in five years.”

This fear of resale risk — not knowing if a local council might later impose registration conditions or restrictions — is enough to slow down the market. Even before any village actually enacts new rules, the uncertainty itself is a deterrent.

Hungary’s Property Law Impact on Banks and Mortgages

The banking sector is also voicing concerns.

Péter Csányi, CEO of OTP Bank, Hungary’s largest lender, warned that the proposed law could hurt mortgage lending by introducing too much unpredictability into property valuations. Banks lend money against the assumption that property can later be resold. If that resale becomes questionable — for legal or political reasons — the entire model becomes riskier.

This could mean:

• Higher interest rates or stricter terms in affected areas

• Reduced willingness to lend at all where local restrictions are expected

• Delays in home loans as lenders re-evaluate risk

As Csányi put it:

“If the law restricts property liquidity, it hurts the very foundation of mortgage lending.”

It’s not a hypothetical issue. If you’re applying for a loan in a village or suburb that’s been in the news about this law, you may already find your bank treating the file with more caution.

Ongoing construction today, uncertain resale tomorrow? Developers across Hungary are pausing projects amid legal uncertainty over how the Identity Protection Law will impact future sales and residency.

Developers on Edge

The development sector has not taken this well.

Even though the latest draft law removed the option for blanket bans, developers fear the lack of legal clarity will stall projects — especially in locations where local councils may later introduce restrictions.

In an interview with Népszava, one developer summed it up:

“We can’t build if we can’t guarantee buyers can register or resell their flats.”

Projects have already been paused or rescheduled in certain areas, including some near Lake Balaton and in commuter towns outside Budapest.

Even small-scale developments, like renovating a press house or dividing a large rural plot, could now face resistance or extra local conditions if new identity rules are adopted. The problem isn’t necessarily the rule — it’s the uncertainty about when and how it might be applied.

The Uncertainty Tax

This law hasn’t even passed yet, but it’s already pricing in a new kind of risk.

Buyers are nervous.
Sellers are wondering if they’ve missed the peak.
Banks are reviewing files more closely.
Developers are pressing pause.

And all of this is happening without a single local council having implemented anything yet.

That’s the power of uncertainty — it acts like a tax. Even if it never materialises into a worst-case scenario, the fear alone can stall a market.

What we’re seeing now is the early stage of the Hungary Property Law Impact — a chill that’s affecting prices, liquidity, and lending, well before a single local rule takes effect.

The removal of the most extreme clause – the outright ban on outsider purchases – is good news. But the tools that remain still shift the balance of power toward local councils and away from individual buyers. We’re entering a period where owning or acquiring property in Hungary may come with localised strings attached.

How that plays out in practice? We’ll have to watch — very carefully — in the weeks and months ahead.

Want More Insight?

In Part Five, I’ll explore how individual municipalities are responding. Who’s planning to adopt identity rules? Who’s resisting? And how are buyers and sellers reacting on the ground — especially in areas where the Hungary Property Law Economic Impact is already being felt?

If you’ve found this series useful, you might also like my ebook:
HOW TO HUNGARY: Budapest & Beyond
It covers property law, residency, taxes, and expert advice — and it’s based on my own experience navigating Hungary’s ever-changing landscape.

You can find it here: howtohungary.com/ebook

And if you prefer video explainers, follow me on Facebook, TikTok or Instagram: @how.to.hungary

Disclaimer: I’m not a lawyer or real estate agent –  just someone who’s done the research so you don’t have to.

Anikó Woods

Anikó Woods is a Canadian-Hungarian writer, technology specialist, and digital strategist who swapped Toronto traffic for Hungarian bureaucracy. She’s the creator of HOW TO HUNGARY: Budapest & Beyond. Since moving to Hungary in 2017, she’s been deep in the paperwork trenches—fact-checking, interviewing experts, and helping others make sense of the madness. Her writing turns chaos into clarity, with a few laughs (and wine recommendations) along the way.