Hungary Is at a Crossroads

 Investors looking for a low-cost foothold in Europe should be paying attention…

The view from the podium was superb. Behind my audience was a panoramic view of the “Pest” part of Budapest across the Danube, the river shimmering in the early morning sun. 

It was 2010. I was in Budapest presenting a seminar on sustainability in non-profit operations to a group of local NGO executives. My topic was timely. The folks who had invited me had booked a spectacular hilltop meeting room… more appropriate for a gathering of bankers than low-income housing activists.  

I guess they wanted to impress me. 

18 months later, that meeting probably wouldn’t have been possible. A right-wing government under Prime Minister Viktor Orbán had come to power, cracking down on foreign influencers like me. 

Over the next 15 years, Hungary gradually distanced itself from European Union principles. Although it remained a member, its transgressions became so significant that in 2022 the EU suspended nearly €30 billion in funding because of concerns about corruption, public procurement practices, and rule-of-law issues.  

In part to cope with this financial crunch—and, if reports are to be believed, to potentially allow opportunities for corruption—the Hungarian government launched a golden visa program in 2024. For a €250,000 investment in an approved real estate fund, a non-EU citizen could get a renewable 10-year residence permit. Citizenship is possible after eight years, although Hungarian is difficult to learn. 

By that time, Hungary’s offering was the cheapest in the EU. It came with a juicy 15% flat personal income tax. But I never recommended it. Having lived under similar governments, I was concerned that Hungary would become too unstable and eventually be kicked out of the European Union. 

Earlier this month, Péter Magyar’s EU-friendly Tisza party overwhelmed Orbán’s Fidesz party, winning a supermajority that allows it to change anything it likes. That includes the Guest Investor Program. Although it hasn’t said anything yet, Hungary’s golden visa could be on the chopping block. 

Before I consider that possibility, let’s talk about Hungary’s attractiveness to potential residents. 

Hungary’s cost of living is dramatically cheaper than that of nearly every other Western country. Even in the capital of Budapest, one can live comfortably on as little as €1,100 a month. A nice flat in the eastern half of the city (Pest) can be had for as little as €450. A decent meal will cost you €6. Utilities are less than 30% of the cost in most other EU countries.  

The public health care system is OK, but not as good as in other parts of Europe. But private health care is excellent, and a doctor’s appointment will only cost you around €70. And of course, Hungary’s taxes are very low. 

The country has excellent public transport, easy access to the rest of Europe, low crime, and a slow, comfortable pace of life. Budapest itself is probably the most “old Europe” city on the continent. It possesses grand architecture, a vibrant café culture, riverfront living, and history in abundance. The only downside is social conservatism, a mild suspicion of foreigners, and limited English proficiency outside major urban centres. 

All of that makes Hungary a potentially great destination for people looking for a low-cost residency option in Europe. The big question is whether that option will still be available under the new reformist government. 

On the negative side, the Guest Investor Program was closely associated with the Orbán era. Critics argue it primarily benefited politically connected interests (not least Orbán’s own son, who was a major player in the real estate sector). New PM Magyar is trying to present himself as more transparent, EU-aligned, and anti-corruption. And the EU has become increasingly sceptical of “golden visa” programs across Europe. All of that suggests a potential tightening. 

That said, there’s also a strong argument for keeping the golden visa. Hungary needs foreign capital. It’s a relatively poor country, on a par with Portugal 20 years ago. Compared to asylum or labour migration, investor migration is politically easier to defend inside Hungary. And in contrast to the previous government’s hostility to foreign ideas, Magyar is keen to make Hungary more cosmopolitan, integrating it economically, politically, and culturally with the rest of Europe. 

That’s why I’ll be keeping a close eye on developments in Hungary for the rest of this year. If things go well, and the Magyar government decides to keep the golden visa, it could be one of the best opportunities to get a foothold in Europe in many years. 

Who knows? In a few years, you too could be sipping excellent kávé (coffee) and enjoying kifli, kolbász and tojásrántotta (bread, sausage, and eggs) for breakfast at a little table under the Linden trees overlooking the Danube…