Greece has implemented a series of significant tax cuts in 2026, aiming to alleviate financial pressures on households and stimulate economic growth. The changes, initially announced by Prime Minister Kyriakos Mitsotakis at the Thessaloniki International Fair last year, represent a broad overhaul of the country’s income and property tax system. This comes as Greece assumes the rotating presidency of the Eurogroup, positioning it to play a key role in eurozone economic policy.
The move follows years of economic challenges and inflation in Greece, and is intended to boost disposable income for citizens. With Kyriakos Pierrakakis now heading the Eurogroup, Greece will be influential in broader European economic discussions. The government expects the changes to positively impact families and encourage long-term residency in less populated areas.
Comprehensive Tax Reform Includes Income Tax Reductions
The most widespread change involves reductions to basic income tax rates, with most brackets seeing a decrease of two percentage points. Notably, the lowest income bracket remains unchanged at 9%. These adjustments are designed to provide relief to working individuals and families across the income spectrum.
However, the income tax adjustments are tiered based on the number of children a household has. For example, taxpayers earning between €10,000 and €20,000 with one child will see their rate fall from 22% to 18%, further decreasing to 16% for two children, 9% for three, and 0% for four or more. The Greek finance ministry estimates annual savings of up to €1,680 for a worker earning €20,000 with four children.
Furthermore, younger workers benefit from especially favorable rates. Individuals aged 25 and under will pay no income tax on earnings up to €20,000, while those aged 26–30 will pay a reduced rate of 9% on the same income level. According to the finance ministry, a 24-year-old earning €15,000 annually could save €1,283, and this rises to €2,480 at €20,000.
The changes also extend to higher income brackets. The intermediate income tax rate for earnings between €40,000 and €60,000 has been lowered to 39% from 44%, providing some relief to middle and upper-middle income earners.
Changes to Property Taxation
Property owners also stand to gain from the reforms, particularly those residing in smaller settlements. The annual property tax, known as ENFIA, will be halved in 2026 for homeowners in communities with fewer than 1,500 residents, with complete abolition planned for 2027. This is presented as a strategy to encourage families to remain in or return to rural areas.
Rental Income Adjustments
A revised tax scale applies to rental income, effective January 1, 2026. Approximately 161,587 property owners earning over €12,000 annually in rental income will receive a tax reduction of up to €1,300. This is achieved through a new intermediate band of 25% for rental income between €12,000 and €24,000, replacing the prior 35% rate.
This updated scale allocates income as follows: up to €12,000 at 15%, €12,001 to €24,000 at 25%, €24,001 to €35,000 at 35%, and any amount above €35,001 at 45%.
Incentives for Long-Term Rentals
Landlords are being incentivized to shift towards long-term rental agreements. Those who lease previously unoccupied properties, or convert short-term rentals to long-term leases, by December 31, 2026, will be exempt from income tax on that rental income for a period of three years. This applies to properties up to 120 square meters, expanding to 20 square meters per additional child for tenants with more than two children, provided lease duration is a minimum of three years.
These tax cuts represent a significant policy shift for Greece, prioritizing both household financial stability and strategic demographic goals. The full impact of these measures on the Greek economy and the Eurozone will be closely monitored in the coming months, especially as Greece takes on a more prominent role within the Eurogroup. Interested parties can follow updates on the Eurogroup website for further developments.
The implementation of these changes is a complex undertaking, and ongoing analysis will assess their effectiveness in achieving the government’s objectives. Keep an eye on financial news outlets for further reporting on the impact to personal finances and the Greek economy in general.
