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Hungarian women who give birth to four or more children exempt from paying income tax, receive loan forgiveness with new law

2019-02-11

A Hungarian girl sticks her tongue out for a selfie with her mother during a parade on March 15, 2017. (Vadim Ghirda / AP)

The more, the merrier.

Hungarian women who give birth to four or more children are exempt from paying income tax for life and will receive loan forgiveness, according to a new law passed.

The law was passed in hopes of increasing the population.

Hungary’s birth rate is currently below the European average, with 1.45 babies born to each woman on average as of 2016, compared to 1.55 for the European area, according to the World Bank.

Women who give birth to four or more children will be exempt from paying income tax for life, announced Viktor Orban, the prime minister of Hungary.

Additionally, young couples may receive interest-free loans of 10 million forint — equivalent to $36,000 — which will be canceled as soon as they have three children.

Hungary’s birth rate is falling by 32,000 a year, BBC reported.

The new law is part of a larger seven-point plan to hopefully produce a “baby boom” in the country.

In addition to tax breaks and loan forgiveness, the new law also sets to give housing subsidies and support for those buying seven-seat vehicles.

Additionally, the government pledged to create 21,000 nurseries over the next three years, and increase spending on the healthcare system by $2.5 billion.

This is not the first time Hungary has passed laws in hopes to help increase the population.

In 2011 and 2012, Hungary allowed new deductions to help families save $400 and $1500 per child on taxes, according to the Institute for Family Studies. Research showed this may have helped boost the country’s population by 6,000 to 18,000 more births from 2011 to 2013.

In 2015, the country announced subsidies for families to build homes. The decree allowed 600,000 fornit — around $2,120 — to families with a single child, as reported by the Budapest Business Journal. Families with two children were eligible for 2.6 million fornit subsidies, equivalent to around $9,180. If they had three children, families were could receive 10 million fornit, or just over $35,308.

The subsidies would also allow tax deductions for the home purchases.

Hungary’s new laws hope to increase the fertility rate to 2.1 by 2030, BBC reported.

Orban said the law should increase the population without depending on immigration — which he said “the West” sees as the answer to falling birth rates in Europe.

"For every missing child, there should be one coming in and then the numbers will be fine,” he said, as reported by BBC.

"Hungarian people think differently,” Orban said. “We do not need numbers. We need Hungarian children."