Magyar said the wealth tax would be introduced from January 1, 2027 at a rate of 1pc for assets over HUF 1bn and 1.5pc for assets over HUF 100bn. He added that the tax base would include real estate, equity, assets abroad and assets under the management of trustees, calculated at market value.

Taxes paid on property and vehicles may be deducted from the tax.

The tax must be paid once every year, based on the value of assets at the end of the previous calendar year. The first deadline for payment of the tax will be August 31, 2027.

Only individuals with net assets over HUF 1bn will be subject to the tax and must file a tax return.

Magyar said KATA eligibility would be extended to people working second jobs, pensioners and people working while enrolled at university. He added that companies and other organisations, not just private individuals, would also be allowed to opt for the tax.

Magyar said more than 100,000 new small businesses could opt to pay KATA under the new rules.

He said thresholds for KATA taxpayers' sick leave and child leave pay would be raised.

Taxpayers opting to pay KATA on their main source of income will pay a monthly itemised tax of HUF 100,000, although that amount will be phased in gradually for private individuals: HUF 75,000 in 2027 and HUF 100,000 from 2028.

Taxpayers opting for KATA for second jobs will pay an itemised tax of HUF 50,000 a month.

A 15pc tax will be levied on invoices to companies and organisations from which the itemised tax may be deducted.

The upper annual revenue threshold for KATA eligibility will be raised from HUF 18m to HUF 22m.

Magyar said the upper annual income limit for professional footballers and other athletes who opt to pay the simplified tax and contribution (EKHO) would be lowered from HUF 500m to HUF 60m, the same threshold applied to journalists, actors and other creative professionals who pay EKHO.

Documents posted with draft legislation on the wealth tax on the goverment website show the measure would impact 15,000 private individuals and 2,000 trustees. The tax is expected to raise HUF 800bn in budget revenue.

The changes to KATA are expected to have a net positive impact of HUF 60bn on the budget.

Fidesz says it doesn't support tax hikes in any form

The opposition Fidesz party said in response to Prime Minister Peter Magyar’s announcement regarding tax changes on Tuesday that the party does not support tax increases in any form.

In a statement, Fidesz said the Tisza government wanted to take money from the people because it had "squandered Hungary’s wealth through six months of inaction".

"Hungary does not need tax hikes, but tax cuts," Fidesz said, adding that every tax increase risked job losses, while every tax cut created new jobs.

"Fidesz does not support any tax increases, because we must protect, not jeopardise, the jobs of the Hungarian people," the statement added.

Magyar announced on Facebook earlier on Tuesday that the government had decided on the details of the wealth tax, the extension of the itemised tax for small businesses (KATA) and on scrapping tax preferences for professional footballers and other athletes.

Speaking at a press conference on Tuesday afternoon about the government’s measures, Fidesz MP Andre Paloc said that the tax increases and new taxes meant that Hungarian families would have less pay to take home, and jobs would become insecure or disappear altogether.

He also said that while the Tisza government talked about the growth in industrial figures, it failed to mention that this was merely the result of investments announced by the previous Orban governments bringing results.

Prime Minister Peter Magyar said in response on Facebook that "it didn’t take long for the members of the ousted government to side with the billionaire oligarchs." He added that the people in question "would undermine the renewed extension of the KATA scheme -- which they themselves ruined -- and the taxation of footballers earning tens of millions".

Source: MTI – Hungary’s national news agency since 1881.

Graphic for illustration purposes only

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