Hungary’s New Property Law Is Here: Final Draft

After months of speculation, leaked proposals, and heated debates, Hungary’s controversial Local Identity Protection Act – also known as the Településvédelem Törvény  – is no longer just a political talking point. On 13 May 2025, the final draft of Hungary’s New Property law was formally submitted to Parliament. If passed, it will take effect on 1 July 2025. And while its title suggests a warm-and-fuzzy mission to protect community values, make no mistake: this is a property law with significant implications for anyone hoping to buy or live in hundreds of towns across Hungary.

Whether you’re a Hungarian looking to settle in a charming village or a foreign buyer eyeing a lakeside retreat, this is the moment to understand what’s really happening. This post breaks down the key points of the final draft, what changed, who it affects, and what to watch for next.

What’s Happened Since May 13: The Final Draft Arrives

Deputy Prime Minister Zsolt Semjén submitted the final draft to Parliament on 13 May 2025. It incorporates feedback from months of consultations and removes some of the more extreme elements floated earlier (such as a total ban on outsiders buying property). The bill is classified as a cardinal law, meaning it requires a two-thirds parliamentary majority to pass – which the governing Fidesz-KDNP coalition already has.

The law is expected to pass before the end of June and enter into force on 1 July 2025

What the Law Will Actually Do (Plain English Edition)

Let’s get to the meat of it. This law gives municipalities new powers to:

1. Set a Population Cap

• Towns can declare a “desired population size.” If their actual population reaches or exceeds it, they can restrict new residents.

2. Control Who Can Move In

• Municipalities can refuse or condition address registration for newcomers. No address registration = no official residency.

3. Enforce Local Pre-emption Rights

• Local governments and residents get first right to buy properties before outsiders (including foreign buyers).

4. Impose Newcomer Conditions

• Towns can set requirements (financial contributions, commitments to uphold traditions, etc.) that outsiders must fulfil to move in.

5. Levy a Settlement Tax

• Local councils can charge a one-time tax on newcomers buying property in the town.

How This Affects Foreign Buyers, Hungarian Citizens, and Second-Home Owners

If you don’t already live in a town (or own property there), you are an outsider in the eyes of this law – regardless of your citizenship.

Foreign Buyers:

• Still allowed to buy, but locals could step in and buy the property first.
• Must apply for address registration, which can be denied or conditioned.
• May have to pay a local settlement tax.

Hungarian Buyers from Other Towns:

• Treated the same as foreign buyers.
• Must request permission to move in if the town has reached its population cap.

Second-Home Owners:

• Can still own and use their home.
• But cannot register their address there without approval.

The key shift is that property ownership and residency are now separate rights. You can buy a house, but the right to officially live in it depends on local approval.

Who’s Exempt and Who Isn’t

You do not need municipal approval to register your address if you:

• Were born in the town or spent a year of childhood there
• Have close family in the town
• Are moving for work or employment
• Are a student enrolled in a local school
• Are buying with a state housing subsidy like CSOK or Falusi CSOK

In short: if you have local roots, a job, or a government-backed mortgage, you’re safe. Everyone else may face scrutiny.

Where This Will Apply: Likely Towns and Tourist Hotspots

The law doesn’t apply everywhere automatically. Each municipality must:

• Declare a “desired population number”
• Show that it has reached or exceeded that number
• Pass a local decree activating the law

Expect the first adopters to include:

• Lake Balaton villages (Tihany, Zánka, Balatonudvari)
• Pest County commuter towns (Nagykovácsi, Telki, Göd)
• Tourist-heavy heritage towns (Hévíz, Szentendre)

Most larger cities won’t opt in, but many 300–400 smaller settlements could.

What Local Councils Must Do Next

After 1 July, towns that want to activate protections must:

1. Pass a decree setting their population threshold
2. Notify the government and update local rules
3. Create procedures for evaluating address registrations

They can choose:

• Whether to ban new address registrations entirely
• Whether to allow them with conditions
• Whether to exercise their right of first refusal on property sales

Towns will also have to publicly define what counts as “reasonable obligations” for newcomers.

How to Know if a Town Is “Protected”

There is no national list (yet), but you can monitor (and I definitely will):

• https://magyarkozlony.hu for official decrees
• Your municipality’s website for local announcements
• https://www.ksh.hu for population data
• Real estate agents with local insight

We’ll also be tracking early adopters in a future blog post: “How to Know if a Town Is Protected” (coming soon).

What Political Figures Are Saying

Róbert Lengyel, Mayor of Siófok, has publicly stated:

“We do not plan to implement any drastic measures. We’re capable of handling our current growth and won’t be using this law as things stand.”

Tibor Navracsics, Minister of Public Administration, has said:

“There are villages that feel their character has been swept away by unchecked settlement. This law ensures organic development, not exclusion.”

Zsolt Semjén, Deputy PM, emphasised:

“We must give communities the right to decide their future.”

Critics, including opposition MPs and housing analysts, warn that:

• It could be used to discriminate against poorer or minority buyers
• It may reduce liquidity in local housing markets
• It adds unnecessary red tape to homeownership

My Take: What Buyers Should Expect This Summer

It remains to be seen how many towns will implement these powers, and to what extent. Some may take a hands-off approach, while others embrace the law fully. For now, uncertainty remains the rule rather than the exception.

This law is Hungary’s most significant restriction on internal migration and property acquisition since the democratic transition. While it won’t block sales outright, it complicates what was previously a simple process. If you’re:

• Buying in the popular villages in the countryside: Prepare for delays and new admin.
• Looking to establish residency: Check local rules before you buy.
• Already own but want to move in: Address registration could get trickier.

Above all: stay informed. Each town will roll this out differently. And if you’re unsure, get help from a lawyer or relocation expert who understands the new landscape.

Resources and References

• Hungarian Parliament 
• KSH Population Data
• Magyar Közlöny
• Telex coverage
• HVG
• Index.hu
• Átlátszó investigation

For practical guidance on navigating Hungary’s property rules, visas, banking, and more — download the HOW TO HUNGARY: Budapest and Beyond ebook.

Subscribe to the H2H Insider Newsletter for ongoing once monthly updates as municipalities begin rolling this out.

Got questions? Leave them in the comments or ***@**********ry.com“>message me directly. We’ll continue tracking this law as it unfolds.

Because in Hungary, buying a home might soon mean buying into the community — quite literally.

Disclaimer: I am not a lawyer or real estate professional. This article is based on my extensive research using the best available Hungarian sources as of 18 May 2025. Always consult a legal or property expert before making decisions based on this law.