Hungary has implemented a policy providing tax relief to mothers.

Mothers in Hungary with one child will be exempt from paying income tax until they turn 30.

In addition, mothers who have two or more children will receive a lifetime exemption from paying income tax.

The new policies are to combat the country’s declining fertility rate.

Elon Musk called the policy a “good idea.”

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The Telegraph reports:

Hungary’s population is expected to fall to 8.5 million by 2050, compared to 9.6 million today, according to forecasts by the Hungarian Research Network, as fewer Hungarian women have children.

Under the new laws, mothers with one child will be exempt from income tax until they turn 30, while those with two or more children will pay no income tax for life.

Hungary’s population decline has been a concern for decades. A baby bust following the 2008 financial crisis saw the country fall to the bottom of the European fertility tables.

International immigration somewhat offsets the declining population, but Hungary faces immense demographic pressure despite providing generous incentives aimed at encouraging having children.

Mothers with four or more children are already totally tax exempt, the state fully funds some fertility clinics, and there are subsidies for parents buying a home. The incentives drove up Hungary’s fertility rate from a low of 1.2 in 2011 to 1.6 in 2021.

“Hungary is making history with the largest tax cut in Europe & the entire Western world!” Hungarian Prime Minister Viktor Orban said.

“We are building the world’s first family-centred economy,” he added.

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Per Euro Weekly News:

According to Hungarian authorities, the initiative represents a “global sensation” and a “new chapter” in Hungary’s economic history. The move aligns with Viktor Orban administration’s long-term strategy to reverse declining birth rates and encourage family growth in the Eastern European country.

The announcement comes ahead of Hungary’s 2026 parliamentary elections, which will take place in April next year. This policy is part of Orban’s push to support traditional families with financial aid.

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Hungary has already introduced housing subsidies, childcare benefits, and low-interest family loans to help young parents. Now, with this tax break for mothers, the government is reinforcing its focus on putting families at the center of its economic plans.

 

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