At the 89th Thessaloniki International Fair (TIF), Prime Minister Kyriakos Mitsotakis announced a new package of tax reforms designed specifically to ease the burden on households and businesses. The measures, which will start to be implemented within 2026, include reductions in income tax, incentives for families and young employees, and targeted relief in real estate and VAT. These reforms, set at €1.6 billion, are expected to impact over 4 million taxpayers. In the article that follows, we will try to explore how these measures are expected to be translated into practice.
Key Measures: An Overview
- Income tax reductions: Effective from 2026, rates will be reduced by two percentage points across most brackets (except the introductory 9%). Families with children will see themselves benefit from even lower rates, with tax eliminated entirely for families with four children.
- Young employees support: Employees under 25 with earnings up to €20,000 will not pay income tax. From 25 to 30, the tax rate drops to 9% instead of 22%.
- Intermediate bracket: For those earning between €40,000–€60,000, their tax will fall from 44% to 39%.
- Rental income: A reduced 25% tax rate will be introduced for rental income between €12,000–€24,000, compared to 35% today.
- Living standards tests: The assumed costs for vehicles and houses is scheduled to be reduced by a 30%, offering relief to approximately 500.000 taxpayers.
- Real estate relief: ENFIA (the Unified Property Tax on real estate in Greece) on primary residences in villages under 1,500 residents will be halved in 2026 and abolished in 2027, while VAT in remote islands under 20,000 inhabitants will drop by 30%.
Eurofast's Take
The introduced tax reforms could create both opportunities and some pitfalls for businesses and individuals. The deep understanding of the new brackets, exemptions, and regional incentives are considered essential for successful and timely for tax planning, corporate structuring, and compliance. Eurofast's expert team in Athens and across Southeast Europe can:
- Assess the direct impact of reforms on your payroll and HR planning.
- Optimise corporate and personal tax strategies to capture new reliefs.
- Provide guidance on real estate taxation, rental income, and VAT changes.
- Ensure compliance while taking advantage of incentives for young professionals and families.
- Prepare and file personal tax returns in line with the updated legislation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
