What Americans Living in Hungary Need to Know in 2025

As an American residing in Hungary, it’s essential to stay informed about recent changes affecting your tax obligations and residency status. Notably, the termination of the U.S.-Hungary tax treaty in 2024 has introduced new complexities. This article provides an overview of these developments to help you navigate your responsibilities effectively.

Understanding these aspects will help you better manage your tax obligations and overall experience while living in Hungary.

Americans living in Hungary: Visa types

Navigating the visa options for permanent residency in Hungary can be complex. Below, we’ve outlined key visa types that may be relevant to you as an American seeking long-term residence in Hungary.

Guest investor residency

Who it’s for: Individuals willing to make a significant financial investment in Hungary.

Overview: This program offers a 10-year residence permit in exchange for a substantial investment in the Hungarian economy.

Requirements:

• Invest at least €250,000 in investment certificates issued by a real estate fund registered with the Hungarian National Bank.
• Alternatively, purchase residential real estate in Hungary valued at a minimum of €500,000.
• Or, provide a monetary donation of at least €1 million to a higher education institution for supporting educational, scientific research, and artistic activities.

Guest self-employed residency

Who it’s for: Entrepreneurs and freelancers planning to establish and operate a business in Hungary.

Overview: This permit allows self-employed individuals to reside in Hungary while managing their own business activities.

Requirements:

• Register a company in Hungary.
• Provide a business plan and proof of expected activity.
• Demonstrate financial stability.
• Secure accommodation in Hungary.
• Obtain valid health insurance.

EU Blue Card

Who it’s for: Highly skilled professionals with a job offer in Hungary.

Overview: The EU Blue Card is a residence permit for non-EU nationals in high-demand professions, facilitating work and residence in Hungary.

Requirements:

• Possess a university degree or equivalent qualification.
• Have a valid employment contract in Hungary for at least one year.
• Meet the minimum salary threshold, which is 1.5 times the average gross salary in Hungary.
• Provide proof of health insurance.

Family reunification visa

Who it’s for: Family members of Hungarian citizens or residents.

Overview: This visa allows spouses, minor children, and dependent parents to join their family members residing in Hungary.

Requirements:

• Proof of family relationship (e.g., marriage or birth certificates).
• Evidence of financial means to support the family member(s).
• Adequate accommodation in Hungary.
• Valid health insurance.

Each of these visa types has specific criteria and application processes. It’s advisable to consult with Hungarian immigration authorities or a legal expert to ensure you meet all requirements and to assist with the application process.

How to apply for a Hungarian visa as a U.S. citizen

Applying for a Hungarian visa as an American involves several steps, whether you’re seeking a guest investor, self-employed, EU Blue Card, or family reunification residency. Here’s what you can expect:

1. Choose your visa type

Decide which residency permit best fits your situation: investor, self-employed, skilled worker, or family member.

2. Gather required documents

• Valid U.S. passport
• Evidence supporting your visa type (such as investment proof, business plan, job offer, or family relationship documents)
• Proof of financial stability
• Health insurance details
• Accommodation documentation

3. Complete your application form

Download or access the appropriate residency application from the Hungarian consulate or immigration authority.

4. Submit your application

Submit the completed application and all documents in person at your nearest Hungarian consulate or embassy. Some permits may allow online submission.

5. Attend an interview

You may be asked to attend an interview to discuss your application and answer questions about your plans in Hungary.

6. Wait for processing

Processing times vary but typically range from several weeks to a few months.

7. Receive your decision

You’ll be notified of the outcome and, if approved, receive your residence permit to enter and live in Hungary.

Healthcare options for Americans living in Hungary

Navigating healthcare as an American living in Hungary can feel daunting at first, but understanding your choices will help you feel more at ease. Let’s take a closer look at how healthcare works in Hungary, what options you have as an expat, and the key benefits and challenges you might encounter.

How the Hungarian healthcare system works

Hungary operates a universal healthcare system, which means basic medical care is available to all legal residents, funded primarily through taxes and social security contributions. Public hospitals and clinics are widely available, but the system can be different from what we’re used to in the U.S.:

• Public healthcare is generally accessible and free or low-cost at the point of service for residents.
• Care is provided through state-run facilities, with general practitioners (GPs) acting as gatekeepers for specialist referrals.
• Wait times can be longer than in the U.S., especially for non-emergency services.

Healthcare options for Americans living in Hungary

As an American expat, your healthcare access depends on your residency status and personal preferences:

• Public healthcare enrollment: Once you obtain a residence permit and register with the Hungarian authorities, you may be eligible to contribute to the national health insurance fund (TAJ), allowing you to access public healthcare services.
• Private health insurance: Many expats choose to supplement or replace public coverage with private insurance. This can give you access to private clinics, shorter wait times, and English-speaking doctors.
• International health insurance: If you travel frequently or want broader coverage, international plans are another option. These often cover treatment both in Hungary and worldwide.

Pros and cons of healthcare for American expats living in Hungary

Understanding the upsides and challenges helps you make informed decisions:

Pros:

• Affordable care compared to U.S. healthcare costs
• Access to universal coverage via public system once registered
• Availability of private and international insurance options

Cons:

• Public system may have longer wait times and fewer English-speaking staff
• Quality of facilities can vary, especially outside major cities
• Private care and international insurance add extra costs

By weighing your needs and preferences, you can choose the healthcare path in Hungary that gives you peace of mind and the support you deserve.

Cost of living for American expats living in Hungary

Adjusting to the cost of living in Hungary can be a big part of your expat journey. For many Americans, Hungary offers a pleasant surprise—your dollar tends to go a lot further here than back home, especially in daily expenses. Let’s break down what you can expect to pay in Hungary compared to the U.S., using Budapest and a mid-sized U.S. city (like Denver) as benchmarks.

Expense Category	Hungary (Budapest, USD)	U.S. (Denver, USD)	Notes/Context
Groceries	$200–$300/month	$400–$600/month	Local markets are budget-friendly; imported goods are pricier in Hungary
Housing (1BR apt, central)	$500–$800/month	$1,600–$2,200/month	Budapest offers much lower rents; smaller cities in Hungary are even cheaper
Public transport	$30–$40/month	$80–$110/month	Budapest’s public transit is reliable and economical
Phone plan	$10–$20/month	$40–$75/month	Mobile and data plans are significantly cheaper in Hungary

Note: These are average estimates and can vary based on lifestyle, exchange rates, and location within each country.

Pros and cons of the cost of living in Hungary for American expats

Pros:

• Lower overall expenses: Your money stretches further, especially on rent, groceries, and utilities.
• Affordable public services: Healthcare, transportation, and education are typically much less expensive.
• High quality of life: Enjoy vibrant city life, cultural events, and travel opportunities at a lower cost.

Cons:

• Lower average salaries: If you’re earning locally, wages are generally lower than in the U.S.
• Imported goods can be pricey: Certain American products or international brands may cost more or be harder to find.
• Housing competition: In popular expat areas of Budapest, demand can drive prices up.

Understanding these differences can help you budget confidently and make the most of your experience living in Hungary. If you’re coming from the U.S., you’ll likely find that everyday life is more affordable, giving you room to explore, save, or simply enjoy your new home.

Where do American expats tend to live in Hungary?

• Budapest: Most American expats are drawn to the capital, thanks to its international schools, vibrant nightlife, English-friendly services, and established expat networks. Districts like District V (Belváros), District VI (Terézváros), and District XIII (Újlipótváros) are especially popular for their central locations and amenities.
• Debrecen: Hungary’s second-largest city, Debrecen, attracts Americans working in education, healthcare, or at multinational companies. The city offers a quieter pace and lower cost of living while still providing good infrastructure and cultural events.
• Lake Balaton region: Known for its scenic beauty and relaxed lifestyle, the Lake Balaton area appeals to retirees, remote workers, and families seeking a peaceful environment with easy access to water sports and outdoor activities.
• Smaller towns and rural villages: Some Americans choose Hungary’s countryside for a more immersive, budget-friendly experience. Living outside the main cities can mean learning more Hungarian and adapting to local customs, but it offers unique charm and slower living.

Tax implications for Americans living in Hungary

Navigating taxes as an American living in Hungary can feel like deciphering a puzzle with pieces from two different countries. We know how overwhelming it can be—between U.S. rules that follow you abroad and Hungary’s own tax system, it’s easy to worry about missing something important. Let’s break down what you really need to know, step by step, so you can feel confident about your responsibilities and avoid surprises.

American expat tax obligations

You still need to file a U.S. tax return every year, no matter where you live. The United States taxes its citizens on worldwide income, so even if all your earnings are in Hungary, you’re still required to report them to the IRS. Key points:

• Deadline: The standard deadline is April 15, but living abroad gives you an automatic extension to June 15. You can request an additional extension to October 15 if needed.
• Income reporting: All income counts—including salary, self-employment, investments, and rental income from properties in Hungary or elsewhere.

Hungarian income taxes

Living in Hungary means you’re also subject to Hungarian tax laws. Here’s what you can expect:

• Tax residency: If you spend more than 183 days in Hungary in a year, you’re generally considered a tax resident and must report your worldwide income to Hungarian authorities.
• Income tax rate: Hungary has a flat personal income tax rate of 15%. Social contributions may apply on top of this, depending on your employment status.
• Filing: The Hungarian tax year is the calendar year, and returns are typically due by May 20 of the following year.

Foreign Earned Income Exclusion (FEIE)

The Foreign Earned Income Exclusion is a valuable benefit for Americans abroad. Here’s how it works:

• What it does: It lets you exclude up to $130,000 (for tax year 2025; this amount is adjusted annually) of qualified foreign earned income from your U.S. taxes.
• Qualifying: You’ll need to pass either the Bona Fide Residence Test (living in Hungary for a full, uninterrupted tax year) or the Physical Presence Test (spending 330 days outside the U.S. in a 12-month period).
• How to claim: File IRS Form 2555 along with your tax return.

Foreign Tax Credit (FTC)

If you pay Hungarian taxes on your income, you can usually claim a U.S. Foreign Tax Credit to help prevent double taxation. Here’s what to know:

• How it works: You get a dollar-for-dollar credit on your U.S. taxes for foreign taxes paid to Hungary.
• Limitations: The credit can’t exceed the U.S. tax owed on the same income. If your Hungarian taxes are higher, you may not owe any U.S. tax.
• How to claim: File IRS Form 1116 with your tax return.

U.S.-Hungary tax treaty

There is currently no tax treaty between the United States and Hungary. The U.S.-Hungary income tax treaty was terminated, effective January 1, 2024. This means:

• No special provisions to prevent double taxation: Americans living in Hungary must rely on standard IRS tools, such as the Foreign Tax Credit (Form 1116) or the Foreign Earned Income Exclusion (Form 2555), to reduce their U.S. tax liability.
• No reduced withholding rates: Income such as dividends, interest, royalties, and pensions may be subject to full statutory rates in both countries, without treaty-based reductions.
• Residency tie-breakers and special relief: The former treaty’s tie-breaker and residency rules no longer apply. Determining tax residency and avoiding double taxation now relies on domestic laws and available credits.

Even without a treaty, you are still required to file a U.S. tax return if you meet the filing thresholds, and to carefully coordinate your Hungarian and U.S. tax filings each year.

Reporting foreign bank accounts

If you have one or more bank accounts in Hungary (or anywhere outside the U.S.) and the combined value exceeds $10,000 at any point in the year, you must file an FBAR (Foreign Bank Account Report). Here’s what matters:

• What to file: File FinCEN Form 114 online, separate from your tax return, by April 15 (with an automatic extension to October 15).
• Other reporting: If your foreign assets are substantial, you may also need to file IRS Form 8938 (FATCA reporting).

Social Security

Your U.S. Social Security obligations and benefits are directly affected by Hungary’s social security system and the U.S.-Hungary totalization agreement:

• Self-employed? If you are self-employed in Hungary, the U.S.-Hungary totalization agreement generally means you only pay social security taxes to the country where you primarily work. Most self-employed Americans living in Hungary will pay into the Hungarian system and not owe U.S. self-employment tax (unless your work is closely tied to the U.S.—check your specific situation).
• Employees: If you’re working for a Hungarian employer, your social security contributions will go into the Hungarian system. Thanks to the totalization agreement, you generally will not pay into U.S. Social Security on the same income, helping you avoid double contributions.
• Earning U.S. credits: Periods of coverage in both the U.S. and Hungary can be combined to help you qualify for benefits in either country if you don’t meet the minimum requirements based on your work history in just one country.

Receiving benefits: You can usually receive U.S. Social Security payments while living in Hungary. Just be sure to keep your address updated with the Social Security Administration and respond promptly to any requests for information.

Frequently Asked Questions