The Cabinet Council under Prime Minister Kyriakos Mitsotakis will discuss today, Tuesday (30/9), the €1.7 billion worth of measures announced at the Thessaloniki International Fair, as well as additional provisions with rent discounts, aiming to incorporate them into a tax bill to be voted on in October. The government’s goal is for the tax relief to reach the pockets of the middle class, young people, and families with children starting from January 2026.
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Cabinet Council measures included in the tax package: Changes to income tax
The central axis of the bill focuses on income tax reductions, emphasizing families with children and young workers up to 30 years old. The new tax scale provides for a 2-point reduction in rates for incomes of €10,000-40,000, while establishing an intermediate rate of 39% instead of 44% for incomes of €40,000-60,000. For young people up to 25 years old, complete tax exemption is provided for incomes up to €20,000, while for the 26-30 age group, the first rate is reduced to 9%. Similarly, families with children will see even greater relief, especially those with four children.
Changes in property taxation
Significant changes are also coming to property taxation. A new intermediate rate of 25% is established for rental income of €12,000-24,000, eliminating the current jump from 15% to 35%. Additionally, incentives are promoted for returning closed residences to long-term rental, with tax exemptions for three years, even for houses over 120 sq.m., provided owners rent them to families with three or more children, or to special categories of civil servants (teachers, doctors, nurses, and uniformed personnel).
New property tax: Which property owner categories are exempted
From 2026, the abolition of property tax on primary residences in small settlements of up to 1,500 inhabitants begins, with a 50% reduction in the first year and complete exemption in 2027. Additionally, VAT is reduced by 30% on islands in the North Aegean, Evros, and the Dodecanese with populations up to 20,000 inhabitants.
How living standards presumptions are “cut”
Changes are also coming to living standards presumptions, which are “cut” by approximately 30% for residences and cars, while for freelance professionals in settlements up to 1,500 inhabitants outside Attica, the presumptive income is limited to half. Special provision exists for new mothers, who will be completely excluded from the presumptive calculation method for three years.
Salary increases in Armed Forces and retirees
On the salary front, from October 2025, special pay scales are reformed in the Armed Forces, Security Forces, and Diplomatic Corps, with significant increases in compensation. Particularly for soldiers, daily compensation rises from €8.8 to €50-100, while salary recognition of five-year university studies as integrated master is established.
Retirees will see gradual abolition of personal differences, which will be reduced by 50% in 2026 and completely abolished in 2027, ensuring increases for 671,000 people who would otherwise receive no enhancement. Additionally, an annual €250 support with income criteria is provided, while for working retirees, the solidarity contribution will be calculated without the work-related increase.
Housing: Relief and incentives for rentals
Special emphasis is also placed on housing. The restriction on new short-term rentals in three saturated municipal districts of Athens is extended for 2026, while tax incentives are established for utilizing vacant residences. Under the new provision, owners who have “closed” properties will be able to avoid taxes for three years, even for houses over 120 sq.m., provided they rent them to families with three or more children or special categories of civil servants. The new regulation from the Ministry of National Economy and Finance provides strong incentives for owners to open properties that until now remained unused, while simultaneously supporting families with children and civil servants who struggle to find housing in areas with serious housing problems, such as in the Cyclades islands and Crete.
Another provision includes protective measures for owners in case tenants leave early, ensuring that tax exemption will apply for the months the property was rented, while providing the possibility of a “second chance” to find a new tenant within a specific timeframe.
Simultaneously, the “Marietta Giannakou” program is extended with a budget of €650 million for upgrading school units, while the construction of 2,000 apartments on former military camp lands is promoted.
