Hungary’s conservative government has announced plans to broaden its programme of supporting families to encourage them to have more children. Announcing the latest initiative on Wednesday, October 25th, Minister of Culture and Innovation János Csák said that married couples intending to buy a new home will be able to apply for a loan of HUF 15 million (€39,000) if they have one child, HUF 30 million (€78,000) for two children, and HUF 50 million (€131,000) for three children. These loans come with a modest 3% interest rate. First-time homeowners need to pay 10% up front, families planning to renovate or expand their homes need 20%.
“The core essence of this initiative is to ensure that every desired child can be born,” Balázs Orbán, Political Director of the Prime Minister tweeted.
The so-called Family Housing Allowance (CSOK) is a non-refundable state subsidy that has been available to families since 2015 to help them buy a home. So far, 233,000 families have benefited from the programme, but changes in the housing market and high interest rates have lowered the demand for CSOK. According to the latest ‘CSOK plus’ initiative, first-time homeowners who wish to access the allowance may purchase a home for a value of up to HUF 80 million (€209,000), while couples who need to extend their home or buy a larger one can buy a house or apartment with a highest value of HUF 150 million (€392,000).
Families won’t have to pay back the principal amount in the first year, only the 3% interest. Once a couple has its first child, they can request a year-long moratorium on their loan. For a second child, 10 million forints (€26,000) of the principal amount is waived, with similar reductions for every subsequent child.
The conservative government of Prime Minister Viktor Orbán—in power since 2010—has taken many other steps to increase the birth rate in Hungary: tax benefits for families, subsidies for first-time married couples, and women with four children or more are eligible for lifetime income tax exemption. Though Hungary has been able to increase its average fertility rate from 1.2 in 2010 to 1.6 in 2021, the rate is still far below the level of 2.1 births per woman needed to ensure a broadly stable population. Orbán Viktor has vowed to implement “new tools” to address the problem. The prime minister has regularly said that he wants to make the changes through family-supporting policies and not follow the lead of Western nations, who believe mass immigration is the solution.
