In his ‘state of the nation’ address Prime Minister Viktor Orbán announced that the government will launch a seven-point family protection action plan.

As part of this, they will introduce an allowance for young married couples with a view to encouraging them to have children, the personal income tax exemption of women with minimum four children and the child care allowance for grandparents, and will extend the first home housing programme. Additionally, there could be a further cut in the mortgage loans of families deciding to have children, a car purchase programme will be launched for large families, and new creche facilities will be created.

Every woman between the ages of 18 and 40 years living in their first marriage and engaged in employment or higher education studies for minimum three years will be eligible to apply for the child allowance of young married couples in respect of children born after the first of July.

An interest-free, any-purpose loan of maximum HUF 10 million will be available, and this option will remain open from July until the end of 2022, meaning that young people will have three and a half years to join this programme.

If a child is born within five years of the application for the loan, the repayment of the loan will remain interest-free and repayment will be suspended for three years. Upon the birth of a second child, repayment will be suspended for another three years and 30 per cent of the principal debt will be cancelled. Upon the birth of a third child the remaining debt will be cancelled in its entirety. If no child is born within five years of application, the loan will be transformed into a loan repayable at the governing market interest rate, and will have to be repaid together with the interest subsidy thereon.

Young people who are already married and have children can also apply for support, but will only be able to request a loan in respect of further children.

From the first of July interest-subsidised loans that can be taken out in conjunction with the family housing benefit scheme ‘csok’ will also be available for the purchase of used homes. At present, families raising or agreeing to raise two children can apply for a HUF 10 million interest-subsidised loan, while families raising or agreeing to raise three or more children can apply for an interest-subsidised loan of HUF 15 million for the purchase or construction of new flats or family houses.

In the future, families with two or more children as well as families agreeing to have two or more children will also be able to use the same amounts for the purchase of used flats or family houses. The maximum interest on the loans with a term of 25 years can be 3 per cent. The HUF 35 million ceiling on the purchase of used properties – which was previously a condition of the availability of ‘csok’ – will be abolished.

The non-repayable grant of ‘csok’ available for the purchase or extension of used homes will be HUF 600,000 in the case of one already existing child or one child to be born in the future, HUF 1.43 million in the case of two children, HUF 2.2 million in the case of three children and HUF 2.75 million in the case of four or more children.

Upon the construction or purchase of a new property, the amount of the grant will be HUF 600,000 for one child, HUF 2.6 million for two children, and HUF 10 million for three or more children.

From 2018 the government has already assumed HUF 1 million from the mortgage loans of large families upon the birth of a third and every further child. Pursuant to the latest measures, the government will assume HUF 1 million already upon the birth of a second child, HUF 4 million upon the birth of a third child, and an additional HUF 1 million upon the birth of every further child. This option will be available in the case of both the interest-subsidised loans provided in conjunction with ‘csok’ and market-based mortgage loans.

From the first of July large families will be able to apply for a HUF 2.5 million car purchase grant: the government will subsidise the purchase of new cars with minimum seven seats for families raising minimum three children. The grant may amount to maximum 50 per cent of the price of the vehicle. This sum will not be reimbursed subsequently: instead, families will have to pay the purchase price minus the grant.

It is to be expected that from next year grandparents who have not yet retired will also be eligible for child care allowance if instead of the working parent(s) they agree to look after their grandchildren at home. In this case, the given grandparent(s) would be eligible for the child care allowance instead of the parents. This seeks to encourage them to play a more active role in the supervision of their grandchildren.

The measure that women raising minimum four children will no lonsger be required to pay personal income tax will also be introduced from next year, and this will apply not only to children under the age of 18, but also to adult children, all the way to retirement. The tax exemption will only be available in respect of work-related incomes, meaning that it will not be available for incomes such as those obtained from dividends.

Additionally, the government will retain the system of family tax benefits, and families will be able to take advantage of the two benefits simultaneously. At present, the maximum amount of the family tax benefit is HUF 10,000 for one child, HUF 40,000 for two children, almost HUF 100,000 for three children, and an additional HUF 33,000 for every further child monthly.

As part of the family support measures, the government is planning to increase the number of available creche places, according to plans from some 50,000 at present to 70,000 by 2020.

(MTI / kormany.hu)