Heritage buildings: 2026 is the final year to utilize the corporate income tax base allowance
The Hungarian Parliament adopted the Summer Tax Package on 27 July 2026, significantly narrowing the tax-saving opportunities available in connection with investments, renovations, and maintenance works relating to heritage buildings.
Under the adopted amendment, the corporate income tax base allowances associated with investments, renovations, and maintenance works concerning heritage buildings will be abolished as of 1 January 2027. Consequently, these allowances may be claimed for the last time in respect of tax years beginning in 2026. It is important to note, however, that the amendment does not affect the possibility of real estate transfer tax refunds and building tax exemptions related to investments in heritage buildings.
In light of the above, affected taxpayers should review their previously completed as well as ongoing investments, renovations, and maintenance projects concerning heritage buildings as soon as possible in order to identify any corporate income tax base allowances that may still be claimed. Particular attention should be paid to allowances generated in previous years but not yet utilized, as under the amendment these may also be claimed for the last time in the tax year beginning in 2026.
Furthermore, it is advisable to begin preparing in a timely manner to meet the administrative requirements necessary for claiming these allowances, thereby ensuring that all available tax-saving opportunities can be utilized to the fullest extent possible.
Under the rules currently in force, in the case of an investment or renovation concerning a heritage building carried out for cultural heritage protection purposes, a taxpayer may, subject to meeting the conditions prescribed by law, claim twice the amount of the relevant investment or renovation expenditure as a deduction from its corporate income tax base. In the case of large-scale investments and renovations, this provision may result in significant tax savings for eligible taxpayers.
The related corporate income tax base allowance may be claimed in instalments, at the taxpayer’s discretion, over several tax years in connection with the period of the investment or renovation. An additional advantage of the regime is that, provided certain conditions are met, any unused corporate income tax base allowance, or a portion thereof, may also be utilized by a related party of the taxpayer, allowing for a more efficient use of the benefit within a corporate group.
A further tax benefit relating to heritage buildings is that the maintenance costs incurred during the tax year may also reduce the corporate income tax base. Taxpayers may take such costs into account as expenses in determining their pre-tax profit and may subsequently reduce their tax base once again by the amount of the maintenance costs, up to a maximum of 50% of their pre-tax profit.
Pursuant to the adopted legislative amendment, the above corporate income tax base allowances will cease to be effective as of 1 January 2027 and may therefore be used for the last time to reduce the corporate income tax base for the tax year beginning in 2026. Consequently, costs incurred in connection with investments, renovations, and maintenance works carried out during the 2026 tax year may still provide a basis for applying the allowance, provided the relevant statutory requirements are met.
It is also crucial to note that corporate income tax base allowances generated in previous tax years but not yet utilized may likewise be claimed for the last time in the tax year beginning in 2026. Accordingly, under the current rules, such allowances are not expected to be carried forward to subsequent tax years. A similar restriction applies to allowances that may be transferred to or received by related parties, as these too may only be utilized for the last time in the tax year beginning in 2026.
In view of the above, taxpayers wishing to continue benefiting from the corporate income tax base allowances relating to heritage buildings should promptly review their previously completed and ongoing investments, renovations, and maintenance projects. As part of this review, it is advisable to assess whether the relevant statutory conditions are met, determine the amount of allowance that may still be claimed, and verify whether all eligibility requirements are satisfied and the necessary supporting documentation is available.
Particular attention should be given to the fact that obtaining the official certificates issued by the monument protection authority, as well as other supporting documentation required for claiming the allowances, may be a time-consuming process. The documentation necessary to apply the corporate income tax base reduction must be available no later than the statutory deadline for filing the corporate income tax return. For taxpayers using the calendar year as their tax year, this means 31 May 2027 for the 2026 tax year.
Given that the 2026 tax year may still provide an opportunity to obtain new allowances in relation to investments, renovations, and maintenance works concerning heritage buildings, as well as to utilize previously accumulated allowances, it may be particularly important to review the remaining tax-saving opportunities without delay.
Our experts are pleased to assist with the corporate income tax review of investments, renovations, and maintenance works relating to heritage buildings, the identification of potentially available corporate income tax base allowances, and compliance with the related documentation and administrative requirements.
