From the first payroll of next year, citizens will feel a noticeable improvement in their income, as emphasized by Kyriakos Mitsotakis in a press conference, presenting the timeline of tax cuts announced at the Thessaloniki International Fair 2025. It should be noted that the interventions announced by Kyriakos Mitsotakis focus on property owners with rental income, standard of living indicators, VAT on remote islands, and ENFIA property tax on primary residences in small villages.
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Regarding rental taxation, from 2026 an intermediate rate of 25% is introduced for the income bracket of €12,001–€24,000, to break the jump from 15% to 35%. The rates of 15% up to €12,000, 35% for €24,001–€35,000, and 45% for amounts above remain unchanged. Combined with the permanent “one rent” refund every November, the economic team expects higher compliance in declared rents.
Additionally, standard of living indicators from 2026 are reduced by 30% for residences and private cars. VAT on remote islands with permanent population below 20,000 residents is reduced by 30%. The government decided to extend the special regime beyond the five islands that already enjoy it, with indicative references to Lemnos, Samothrace, Kastellorizo, Karpathos, Fourni and smaller islands of the Dodecanese and North Aegean.
ENFIA property tax on primary residences is reduced by half in 2026 and eliminated from 2027. The measure concerns settlements with up to 1,500 permanent residents, aiming to prevent rural abandonment and provide relief to households in low-value areas.
When changes will appear in salaries
Employees will see the improvement from January 2026, through reduced monthly withholding. The gradual specification and legislation of the measures will be incorporated into the 2026 Budget and related provisions.
What Kyriakos Mitsotakis said about the package amount and 13th salary in public sector
At the same time, the prime minister spoke about a “social dividend” of €1.7 billion distributed in a way to further strengthen families with children and the middle class. He also emphasized that a larger amount would violate current fiscal rules and that the choice was consciously oriented toward permanent tax cuts instead of horizontal benefits.
Responding to a related question, Mr. Mitsotakis noted that a 13th salary would require €1.3–1.4 billion annually, thus would “consume” almost the entire available margin. “You can’t have both a 13th salary and the tax cuts we announced,” he said, calling on those who disagree to state directly how they would direct surpluses of the same amount.
