Hungarian women with four children or more will be exempted for life from paying income tax, the prime minister has said, unveiling plans designed to boost the number of babies being born.

As part of the measures, the Government also announced a low-interest loan of €31 500 for women under the age of 40 marrying for the first time. A third of the debt will be forgiven if two children are born to the couple and the entire loan waived after a third child.

A loan program for families with at least two children to help them buy homes will be expanded.

For families struggling with housing, the government will give €3,150 towards a mortgage after the birth of a second child, and €12,580, after a third child, with an additional €3,150 for every subsequent child. Grand-parents could be eligible for “GYED” – a type of paid maternity leave until their grandchildren reach the age of three. The Hungarian nursery system will be expanded with 21,000 new places by 2022.

A subsidy of almost €8,000 will be offered toward the purchase a seven-seat vehicle for families with three or more children. The government also plan to spend an extra €2bn on the country’s healthcare system.

State Secretary for Families Katalin Novak told the BBC the government’s new package is based on the number of babies couples would actually like to have, and then to encourage them with financial help. The aim is to increase the fertility rate from 1.45 to 2.1 by 2030.

Hungary’s population is falling by 32,000 a year as women are having fewer children even than the EU average.

According to Mr Orban, it was also a way of ensuring Hungary’s future without depending on immigration.