The reforms target personal income tax, VAT, and property taxation, with key measures set for 2025 and 2026.

RF Report

Greece’s Ministry of National Economy and Finance has unveiled a draft law aimed at boosting citizen income, addressing demographic challenges, and increasing long-term rental housing availability. The reforms target personal income tax, VAT, and property taxation, with key measures set for 2025 and 2026.

The proposed draft bill was submitted to the parliament on 27 October 2025.

VAT measures

The draft law introduces targeted VAT reductions and transitional relief for construction:

  • VAT reduction for islands (from  1 Jan 2026): Goods and services in small islands of the North Aegean, Evros (Samothrace), and Dodecanese will enjoy a 30% VAT reduction, excluding tobacco and transport. Existing reductions for Lesvos, Kos, Samos, and Chios remain conditional.
  • Construction sector relief: Suspension of VAT on new properties is extended until 31 December 2026, with real estate transfer tax applied instead.

Property-related measures

The reform updates property taxation and promotes long-term rentals:

  • Real estate income tax (2026): Reduced rates are introduced for mid-range property income brackets.
  • Long-term leasing incentives: Tax exemptions apply for three-year leases of up to 120 sq.m., extendable for dependent children. The measure targets properties previously vacant or used for short-term rentals and applies to key personnel such as medical staff, teachers, and security forces.
  • Gradual abolition of EN.F.I.A.: Principal residences in small settlements (up to 1,500 inhabitants) will receive a 50% tax reduction in 2026, moving to full exemption from 2027, with a property value cap of EUR 400,000.

Personal income tax changes

The draft law introduces significant adjustments to the personal income tax (PIT) system, especially benefiting families and young taxpayers. Key measures include:

  • Income tax scale reform (2026): Tax rates for lower income brackets will be reduced based on the number of dependent children. Families with four or more children will pay no tax on the first EUR 20,000 of income. Young taxpayers under 25 will pay zero tax on income up to EUR 20,000.
  • Medical staff relief: On-call pay (efimeries) for medical personnel will see a rate reduction from 22% to 20%.
  • Minimum income and living expenses (2025): New mothers, small businesses in rural areas, and school canteen operators benefit from reduced minimum income thresholds. Objective living expenses for housing, vehicles, and boats are lowered, including incentives for zero-emission vehicles.
  • Electronic payment incentives: Tax incentives for electronic transactions are extended to 2026, including special allowances for health expenses and service costs. Researchers and academic staff will no longer pay income tax on special library allowances starting 2026.

Other measures

  • Investment incentives: Strategic sectors including defense and manufacturing can benefit from a super-deduction of 100% of eligible expenses, capped at EUR 150 million per investment plan.
  • Electronic payment and communications: Mandatory acceptance of instant payments by legal entities is delayed to 1 December 2025. The subscription television fee will be abolished from  1 January 2026.

Earlier, Ministry of Finance presented the Draft State Budget for 2026 to the Standing Committee on Economic Affairs of the Hellenic Parliament for discussion, on 6 October 2025, focusing on fiscal stability, social support, and investment-driven growth, with no new taxes and priorities centred on income growth, regional development, and targeted tax relief.