The Ministry of National Economy and Finance has submitted to Parliament a new tax bill titled “Tax Reform for Demographics and the Middle Class – Support Measures for Society and the Economy.” The bill constitutes a broad package of reforms covering nearly the entire spectrum of tax policy, aiming to reduce the burden on households, support businesses, and strengthen regional areas.
Changes and tax relief measures in the bill
First, key provisions of the Income Tax Code are being amended. Tax brackets and rates for employees and pensioners are being redefined, with reductions introduced based on the number of children or age. The same reductions will apply to business income, while for public-sector doctors, the rate on on-call duty pay is reduced from 22% to 20%. At the same time, tax incentives for electronic payments will remain in place for 2026.
Second, an exemption from presumptive income (imputed income) is introduced for new mothers during the year of childbirth or adoption and for the following two years. The favorable regime for professionals operating in small settlements of up to 1,500 residents is also extended.
Third, rental income taxation is changing. A new intermediate income bracket of €12,000–€24,000 is created, with a 25% rate—reduced from the previous 35%—while higher brackets are adjusted accordingly. The measure exempting long-term rental income from tax for properties previously declared vacant or used for short-term rentals will also continue.
Fourth, ENFIA (property tax) will be reduced by 50% in 2026 and fully abolished from 2027 for primary residences located in settlements of up to 1,500 residents (or 1,700 in Evros) with a property value up to €400,000. This measure particularly benefits villages and small communities in rural Greece.
Fifth, VAT rates will be reduced by 30% on the islands of the North Aegean, the Dodecanese, and Samothraki, while the VAT suspension on unsold new buildings will be extended through 2026.
Additionally, a new regional investment support framework is established under EU Regulation 651/2014, providing a 100% deduction of eligible expenses and fast-track licensing for new investments up to €150 million, valid through 2028. The subscription TV fee will also be abolished.
Wage and allowance changes
Part C of the bill sets a new pay framework for the Security Forces, including allowance increases, a management bonus, an expanded frontier allowance, and new compensation for firefighters. The personal pay differential is preserved, and a maximum salary cap is set equal to the base pay of the Hellenic Police Chief.
Part D introduces adjustments to diplomats’ allowances, full tuition coverage for children of Foreign Ministry employees, and a special duties allowance for correctional facility staff.
Part E establishes annual funding for the Greek Film Center and provides a one-month extension (until December 1, 2025) for the implementation of the IRIS electronic payment acceptance requirement by businesses, to ensure a smooth transition.
The bill is expected to be debated immediately in parliamentary committees and voted on in the coming days, so that the new tax provisions can take effect on January 1, 2026.
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