Tax cuts and support measures worth €1.7 billion are included in the tax bill that entered public consultation today. The tax relief package and salary increases, announced by the Prime Minister at the Thessaloniki International Fair, targets the middle class, young people, and families with children. The measures will be implemented from January 1, 2026.
According to a Ministry of Finance announcement, the bill “Tax Reform for Demographics and the Middle Class – Support Measures for Society and the Economy” is part of the government’s overall strategy to strengthen the middle class, support families with children, address the demographic problem, and create strong incentives for development and investment. The public consultation on the tax cuts bill will remain open until October 22 on the electronic platform www.opengov.gr, allowing citizens and organizations to actively participate with suggestions and comments.
Tax cuts: Main pillars of the tax bill with new support measures:
A. TAX REGULATIONS
New income tax brackets focusing on middle class and families:
- 2 percentage point reduction in tax rates for incomes from €10,000 to €40,000 and new bracket up to €60,000.
Special reductions for families with children and zero tax for large families.
Zero tax for young people up to 25 years old and 9% rate for those up to 30 years old. - Gradual abolition of property tax for main residences in small settlements
From 2026, 50% reduction and full exemption from 2027 for settlements up to 1,500 inhabitants (and up to 1,700 in Evros).
- New intermediate rental income tax rate
Introduction of 25% rate for rental income between €12,000–€24,000, benefiting over 160,000 property owners.
- 30% VAT reduction on border islands
From 1/1/2026 on North Aegean islands, Samothrace and Dodecanese islands with up to 20,000 inhabitants.
- Reduction of living standard presumptions
30–35% reduction for residences and readjustment based on emissions for vehicles after 2010.
- Extension of tax incentives for long-term rentals
Extension until 2026 of tax exemption for vacant properties being rented, with favorable terms for large families, educators and uniformed personnel.
- 100% super-deductions for investment expenses
For investments in strategic defense sectors, vehicle manufacturing, aircraft and components.
- Abolition of subscription TV tax
From January 2026, the 10% tax on subscription television bills is abolished.
- New facilities for freelancers
50% reduction in minimum income for settlements up to 1,500 inhabitants, as well as for school canteens nationwide.
Exemption from presumptive income for new mothers for three years after childbirth.
B. SALARY REGULATIONS
- New pay scale for police, fire service and coast guard
Increases from October 2025 and new administration allowance.
- Salary interventions at Ministry of Foreign Affairs
Increases in special duty allowances and tuition compensation for employees’ children.
- Recognition of five-year studies as postgraduate
Promotion by two salary grades for approximately 5,000 civil servants.
- Tax-free library allowance
The allowance for faculty members and researchers is exempted from income tax.
- New allowance for correctional facility staff
Establishment of €100 allowance and replacement of horizontal unhealthy work allowance with new, job-specific one.
- Extension of border area allowance
The €130 allowance for Evros and border islands extends to police officers in mainland border units.
- New salary distinction at General Secretariat for Coordination
Salary upgrade for Directors of the Prime Minister’s Office.
- Recognition of previous service and research work
For salary advancement of researchers in universities and research institutes, regardless of contractual relationship.
C. ADDITIONAL MEASURES
- Extension of electronic transaction incentives until 2026
30% deduction from taxable income for expenses using electronic payment methods to specific professionals.
- Reduced taxation on medical on-call duties
From 22% to 20% autonomous taxation rate.
