In power since 2010, Prime Minister Viktor Orban has struggled to revive Hungary’s economy after last year’s downturn following a surge in inflation to more than 25% in the first quarter of 2023, the highest level in the European Union.
The economy ministry said the proposal would allow the full amount of savings to be used next year for renovations, equity for new mortgages or repayments for existing mortgages.
“The government will eliminate bureaucratic hurdles to allow people to decide if they want to voluntarily use their savings for housing purposes,” the ministry said in a statement.
The ministry said more than 1 million private pension fund members had savings worth 2 million forints ($5,457) on average, which could now be used tax-free for housing purposes.
Previously government officials have signalled that the planned moves could channel 300 billion forints ($817.53 million) to the housing market next year by releasing some of the savings held in private pension funds.
($1 = 366.49 forints)
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