Employers can assist their employees by providing up to HUF 5 million as tax-free fringe benefit to repay mortgages or purchase their homes, Minister for National Economy Mihály Varga said after signing the related ministerial decree.

The Minister hopes that this opportunity will significantly assist Hungarian families to repay their forint or foreign currency loans and purchase their homes.

According to the regulation, the employer is entitled to provide up to HUF 5 million for an employee within each five-year period – in addition to wages – as repayment of a forint or foreign currency denominated mortgage. As the debt of Hungarian families average HUF 7 million, this amount is significant.

The tax-free fringe benefit can be utilized for the purchasing of a new or used home or the construction of one. The amount provided cannot exceed 30 percent of purchasing price or construction costs.

Mihály Varga stressed that over the past years the Government has implemented several relief measures for foreign currency debtors, through which the homes of more than half a million families could be saved. Among these the Minister singled out the exchange rate barrier scheme, the early repayment scheme and the tax exempt status for the repayment of loans.

The latest option complements these measures, allowing employers to improve by as much as HUF 80 thousand per month the living conditions of their employees.

(Ministry for National Economy)