Hungary Offering $35,000, Lifetime Tax Exemption For Having Lots Of Children

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Faced with a declining birth rate and an unwilling to fill population shortfalls with immigrants like some of its European neighbors, Hungary has rolled out a seven-point “Family Protection Action Plan” which showers boatloads of cash, loan assistance and tax breaks to couples who agree to crank out lots of Hungarian children. 

For starters, the state is offering $35,000 to couples who get married and have at least three children. Specifically, women under 40 who are getting married for the first time will receive an interest-free, general-purpose loan of $35,000. Upon the birth of the couple’s first and second children, loan payments will be suspended for three years each – with 1/3 of the principal paid off after the second child. After the third child is born, the debt will be wiped out

Couples with two or more children can also use their loans for the purchase of an existing property – but it gets better. 

“People living in villages should wait just a little bit longer,” said Prime Minister Viktor Orbán in February. “Within a few weeks, we would like to announce a scheme specifically customised to their needs. This means that today young married couples agreeing to have two children are eligible for grants worth 22 million forints ($75,000 US) for starting their lives and creating their first homes, while families agreeing to have three children are eligible for grants worth 35 million forints ($120,000 US),” said Orbán in his February announcement. 

Hungary will also help out with mortgages – picking up the tab on roughly $13,500 US after the couple’s third child, with an additional $3,500 US of relief for each further child.

Moreover, women who have given birth to and raised four children will pay no income taxes for the rest of their lives, while grandparents who are still working are entitled to take leave to help take care of their new grandchildren. 

There’s even a $9,000 subsidy for the purchase of a seven-passenger vehicle. “If you’ve ever tried to fit three children with car seats and everything else you need for children and probably the dog too in a car, you know how hard it is,” said Hungary’s minister of state for family, youth and international affairs, Katalin Novák. “Cars in Europe also tend to be smaller than American cars”

As The Federalists Emma Elliott Freire notes, “An unusual feature of the subsidies is that they go into effect while a child is still in the womb. Parents can claim the relevant subsidy for their baby as soon as an expectant mother reaches her second trimester of pregnancy.” 

“This is a philosophical aspect for us. We believe life begins at conception. We value unborn children, not only born children,” according to Novák, who added: “Hungarian young people are very family friendly. They want to get married and have at least two children. If that’s a fact, then we have to help them.” 

Meanwhile, it looks like Orbán’s existing measures to boost fertility have been working since he took office. 

She also argues the government’s policies are already proving successful. “Fertility has increased by more than 20 percent since 2010 [when Orbán took office]. It hit an all-time low of 1.25 in 2010 and now it is at 1.49,” she says. This still falls far short of the fertility replacement rate of 2.1, but Novák believes all signs point in the right direction for the long term, particularly the marriage rate.

Between 2002 and 2010, under the Socialist government, the current opposition party, marriages decreased by 23 percent. Since 2010, marriages have increased by 43 percent,” says Novák. She believes if marriage rates go up, more children will inevitably follow. Novák also points out that since 2010, divorces have decreased by 29 percent and abortion in Hungary has fallen to an all-time low. –The Federalist

The catch? 

In order to receive the benefits, women must remain married and employed

“We link family support to work. You have to take part in the labor market. Unemployment is at 3.4 percent. We struggle more with a lack of labor force,” according to Novák.

“We don’t want to change people. We want to make it possible for them to raise a family if they wish to,” she added. “I have three children with my husband. I know that there comes a moment when you sit down and decide if you want to have another child. You discuss pros and cons. We want to put more arguments in the pros column. It’s up to you, but we want to make it easier to have a child or another child.”

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