Greece’s Ministry of National Economy and Finance set out a draft bill of permanent tax and pay measures that reshapes personal income taxation and introduces targeted relief for families, young workers, regional residents, property owners and parts of the public sector. The ministry put the cost at EUR 1.76bn in the first year, with an average annual cost of around EUR 2.5bn from 2027, and said more than four million taxpayers would see higher net income from 1 January 2026. At the core, personal income tax rates for EUR 10,000–40,000 of income fall by two percentage points (22% to 20%, 28% to 26%, and 36% to 34%), with a new 39% bracket for EUR 40,000–60,000 and a 44% top rate retained for very high incomes. Additional reductions apply to the first EUR 20,000 for families with children (18% with one child, 16% with two, 9% with three, and 0% with four or more), applying to both working parents, while workers aged up to 25 pay no income tax on income up to EUR 20,000 and those aged 26–30 face a 9% rate on that band. Regionally, ENFIA on primary residences in settlements of up to 1,500 residents (1,700 in Evros) is set to fall 50% in 2026 and be abolished in 2027, except for homes valued above EUR 400,000, alongside a 30% VAT reduction for specified border Aegean islands; rental income taxation is adjusted via an intermediate 25% rate for EUR 12,000–24,000 of rents, and the bill extends through 2026 both the VAT suspension on new builds and a three-year income tax exemption for long-term leases of vacant homes. The package also reduces presumptive living-expense assessments by 30–35% for homes and cars, shifts post-2010 vehicle assessments to an emissions basis, and includes a 200% tax deduction for qualifying investment spending in specified defence manufacturing activities, while extending electronic-payment incentives into 2026. Several elements are staged, including the ENFIA phase-out over 2026–2027 and additional tax exemptions for self-employed professionals expected to begin in early 2027. The ministry also flagged that the announced change to the offsetting of pension increases against the personal difference will be legislated separately once an ongoing actuarial study is completed.
Ministry of National Economy and Finance (Greece) 2025-10-31
Greece’s Ministry of National Economy and Finance tables draft permanent EUR 1.76bn tax reform with income tax cuts from 2026
Greece's Ministry of National Economy and Finance proposed a draft bill introducing permanent tax and pay measures, including personal income tax rate reductions and targeted relief for families, young workers, and regional residents. Costing EUR 1.76bn in the first year and averaging EUR 2.5bn annually from 2027, these measures aim to increase net income for over four million taxpayers from January 2026. Key changes include reduced tax rates for various income brackets, regional tax adjustments, and incentives for investment in defence manufacturing.