Tax-free employee housing support

Tax-free employee housing support

This tax-free form of employer benefit can be provided to employees. It is support provided by the employer for housing purposes and for the final repayment or repayment of housing loans, which comes with much more favorable tax conditions than those of wage benefits.

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Sándor Hegedüs partner, head of tax

Sándor Hegedüs

Tax expert

Gábor Fajcsák, RSM Hungary, Tax Manager, Qualified International and Value Added Tax Expert

Gábor Fajcsák

Partner, Head of Tax Services


In the employee housing support program, employers may provide employees with a tax-free benefit under tax conditions much more favorable than those of wage benefits for the purchase, building, extension and modernization of housing and the final repayment and repayment of housing loans and housing loans taken out from a former employer.

What qualifies as tax fee employee housing support?

The Act on Personal Income Tax provides a clear definition in this regard according to which the following provided by the employer shall qualify as exempt from tax: 

  • non-refundable support 
  • provided to the employee 
  • for housing purposes 
  • through a credit institution, based on the credit institution’s certificate, including 
  1. the forgiven amount of housing loan provided by the employer and 
  2. the support provided for the final repayment or repayment of or payment of other obligations relating to a housing loan taken out from a credit institution, financial enterprise or a former employer 
  • up to the amount of 30 percent of the purchase price or total construction or modernization cost 
  • but in a maximum amount of 5 million forints in the case of multiple employees including the amounts paid under this title in the four years before disbursement 
  • provided that the number of rooms in the flat does not exceed the justified housing need to be specified in the government decree on state housing support. 

Why should you apply the tax-free employee housing support benefit?

The tax-free employee housing support is a favorably taxes benefit form for employees and, at the same time, an easy to regulate means for employers to ensure employee commitment. 

What purposes can the tax-free employee housing support be provided for?

Tax-free employee housing support can be provided for housing purposes or for the final repayment or repayment of housing loans. 

The following qualify for housing purposes: 

  • acquisition by way of a sale and purchase transaction or other onerous contracts of the ownership of a flat located in Hungary and the land use right relating to the flat (including the closed-end leasing of the flat), 
  • a building of a flat in Hungary or having a flat built in Hungary, 
  • increasing of the floor space of a flat located in Hungary generating an extension by at least one room for living, 
  • modernization as defined in the government decree on state housing support, 
  • transformation for the purpose of accessibility for the disabled
  • final repayment and repayment of a loan taken out for housing purposes from a credit institution, a financial enterprise or a former employer. 

Who is our offer for?

We offer the program to employers who wish to use the opportunity of providing a tax-free benefit which may improve employee satisfaction and, at the same time, are willing to precisely comply with the administrative requirements. 

How much saving can be achieved with the tax-free employee housing support?

The table below presents the tax burden and employer cost on 100 units of net benefit in the case of the different benefit forms: 

Wage cost 2018Fringe benefitsCertain specified benefits

Tax-free benefits

Tax burden





Total employer cost





Conditions of applying the tax-free employee housing support

  1. Preparation of a policy specifying the detailed rules of the benefit 
  2. Filling out of an application by the employee 
  3. A conclusion of a contract, agreement with the employee regarding the conditions of the benefit 
  4. Declarations issued by the employer 
  5. Preliminary examination of the fulfillment of the conditions of eligibility for the benefit

  6. Technical administration of the benefit in accordance with legal regulations 
  7. Obtaining of the certificates and documents proving used according to the purposes specified by legal regulations

Why should you turn to RSM Hungary for the administration of the tax-free housing support benefit?

  • Our qualified experts help in the preparation of the policy.
  • We prepare sample documentation.
  • Before the provision of the benefit, we prepare a detailed information material on the conditions of the benefit.
  • If requested, we present the conditions of the benefit to employees and answer arising questions. 
  • Before the provision of the benefit, we review the documents and declarations received from employees and examine eligibility for the tax-free support.

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