CSOK, the Hungarian family housing allowance was created to support families in finding a home. Young married couples who pledge to have children are eligible for a non-refundable allowance and favorable interest rates for property purchase. Now it seems the conditions for eligibility will be severely reduced starting from 2024.

Family housing allowance and prenatal loan

Currently two main government subsidies are available two families who want to find a new home: the family housing allowance (CSOK) and the prenatal loan (“babaváró hitel”) – both of which will be available only on much stricter conditions starting from 1 January 2024.

CSOK has two main elements:

• A non-refundable allowance, the amount of which depends on the type of property purchased (existing or newly built) and the number of children pledged.
• A favorable loan, with an interest rate as low as 3%.

The prenatal loan is available not only for property purchase but also for other purposes – although property purchase remains the most popular use alongside home renovation, the installation of more energy efficient equipment, or car purchase. Here the number of children affects the repayment scheme: after the arrival of the first child is announced (so from the 12^th week of pregnancy), the loan is free of interests, after the second, the debt is reduced by 30%, and after the third, the remaining debt is forgiven.

Changes from 2024

While the sums available in each subsidy scheme increase from 1 January 2024, the number of eligible couples is reduced.

• The maximum amount of CSOK (after 3 children, for building or buying new real estate) is increased to HUF 15 million from 10 million.*
• CSOK will not be available in communities with a population above 5,000, meaning that families will not be able to take advantage of neither the allowance itself nor the additional tax benefits (including VAT reclamation).
• The maximum amount of the prenatal loan is increased to HUF 11 million from 10 million.
• The age limit for women applying for the prenatal loan is reduced to 30 from 40.

With these measures, the government now seems to favor real estate investment in rural areas (while severely reducing the options of urban families). It seems the intention is also to turn the trend of women having kids increasingly later in life.

*Elaborating on the changes to the maximum amount of CSOK in each scenario:

CSOK pledge	1 child	2 children	3 children
New property	HUF 600,000 >> HUF 1 million	HUF 2.6 million >> HUF 4 million	HUF 10 million >> HUF 15 million
Existing property or renovation / extension	HUF 300,000 >> HUF 500,000	HUF 1.3 million >> HUF 2 million	HUF 5 million >> HUF 7.5 million

Effects on families’ options for real estate purchase

The current schemes are available until the end of this year. If you are planning property purchase for your family, you can still apply for the allowance and take a loan, so it might make sense for you to hasten your plans a bit. From next year on, you will not be able to rely on these constructions, only on the offers of commercial banks. However, because of the high interest rates resulting from the high basic interest rate from the Hungarian National Bank (MNB), that might mean that you need to pay a lot more for the same home. There are various calculators online that can help you do the math and prepare for the next big decision of your family life.

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