In a historic move to tackle declining population growth, Hungary has announced massive tax exemptions up to the age of 30 for women who have one child. Women who have two or more children will be completely exempt from paying income taxes throughout their lives. This move is an expansion of an existing policy wherein life-long income tax exemptions are granted to mothers with four or more children.
The Hungarian authorities dubbed this decision aimed at boosting the country’s birth rates as a “global sensation” and a “new chapter” in Hungary’s economic history.
During his State of the Nation speech in Budapest, Hungarian Prime Minister Viktor Orban announced that the tax exemptions for women with three children would take effect in October 2025 and in January 2026 for those with two kids.
In addition to this, the interest rates on housing loans will be capped at 5% beginning in April, as part of steps to shore up the economy. PM Orban called fresh tax exemptions “the biggest tax reduction programme in Europe.”
“This will be a huge expense, but the reviving economy, the measures to support businesses and full employment combined are capable of paying for this in a way that the budget deficit and public debt both decline,” the Hungarian Prime Minister said.
Taking to X, Prime Minister Viktor Orban said, “Hungary is making history with the largest tax cut in Europe & the entire Western world! We are building the world’s first family-centred economy: One-child mothers exempt from income tax until they turn 30. Two or more children? No income tax for life! Securing the future of Hungarian families for decades to come.”
Hungary is making history with the largest tax cut in Europe & the entire Western world!
— Orbán Viktor (@PM_ViktorOrban) March 16, 2025
We are building the world’s first family-centred economy:One-child mothers exempt from income tax until they turn 30.
Two or more children? No income tax for life!
Securing the… pic.twitter.com/iGY96p5LiZ
Informing about the budget of the tax deduction programme, Hungarian Economy Minister Marton Nagy said the tax exemption for mothers of three comprises 250,000 people and costs the budget 170 billion forint ($441 million) every year. The Hungarian authorities said that at present, around 70000 mothers of four children are exempt from paying taxes and this costs about 50 billion Hungarian forints annually.
Notably, much like many other European nations, Hungary is also witnessing a sharp decline in birth rates. Data shows that in 2023, Hungary’s population shrunk by 15,000. The country’s total population is estimated to be around 96 lakh. In the last decade, reports say that Hungary’s population has slumped from nearly 10 million to 9.7 million. The proportion and number of childless people in Hungary’s 2022 census recorded a substantial surge.
As per the preliminary demographic data by the Central Statistical Office (KSH), in December 2024 alone, 6,339 children were born while 11,773 people died. This caused a natural population drop of 5,434 and represented a 4.1% drop in births and a 7.0% decline in deaths compared to the same month in 2023, Budapest Business Journal reported.
In 2024, Hungary’s total fertility rate fell to an estimated 1.38 children per woman. This is in line with a rapid population and birth rate decline in many developed countries, like Japan, South Korea and Singapore.
