The pressure faced by households and young people due to high rental prices and the lack of available housing has elevated the issue of housing into a major social and economic concern. In this context, new policies aim to address the problem through a combination of tax relief measures and interventions focused on the utilization of public assets, with the overarching goal of expanding supply and strengthening access to affordable housing.
A central component of the new policy package is the introduction of an intermediate tax rate of 25% for rental income ranging from €12,000 to €24,000 annually. This segment of the market affects approximately 150,000 households, primarily small-scale property owners with one or two properties, who rely on rental income as a significant part of their earnings.
This initiative serves a dual purpose. On one hand, it reduces the tax burden on individuals caught between the lower and higher tax brackets, offering immediate financial relief. On the other hand, it is designed to serve as an incentive for declaring actual rental income, thereby curbing the phenomenon of tax evasion. The Prime Minister has also indicated the possibility of further tax reductions in the future, contingent on increased compliance and consistent reporting by property owners.
Particular emphasis was placed on reforms to the Single Property Tax (ENFIA), a longstanding point of contention between the state and citizens. From 2026 onward, ENFIA will be reduced by 50% for properties located in villages with populations of up to 1,500 inhabitants. As of 2027, the tax is scheduled to be completely abolished in these areas. This measure is expected to provide substantial relief to permanent residents of small communities, who often face limited income opportunities, while also acting as an incentive for the revitalization of rural regions. The aim is to encourage more individuals to retain or acquire properties in villages, helping to stabilize local populations and counteract rural depopulation.
Alongside these new fiscal measures, the government has announced the continuation and enhancement of several existing programs already in effect. One such initiative is the extended prohibition of new short-term rental listings in central Athens through 2026. This measure seeks to address the over-tourism of residential neighborhoods, where the proliferation of short-term rentals has drastically reduced availability for long-term residents, contributing to rising rents and the displacement of local populations.
Another key measure is the three-year tax exemption for owners of vacant properties who choose to lease them out. This policy is intended to mobilize a significant stock of underutilized housing. Thousands of apartments currently remain unoccupied, often due to tax burdens or uncertainty. The exemption offers a strong incentive for owners to reintroduce these properties to the rental market, thereby increasing supply.
The government also confirmed the continuation of the "My Home II" and "Renovate – Rent" programs. The former provides low-interest loans for individuals under the age of 39 seeking to purchase their first home, while the latter offers subsidies for property renovations on the condition that the renovated units are offered for long-term rental, thereby improving the stock of quality housing available.
In parallel, a new legislative initiative titled the “Social Development Exchange Law” is expected to be passed in Parliament this week. This law introduces a new model of public-private partnership for the development of housing on public land, with the stipulation that the resulting units be allocated according to social criteria. In this context, an agreement has already been reached with the relevant ministry for the utilization of inactive public land owned by the Armed Forces. Specifically, three former military sites—in Moschato, the Ziakas Camp in Thessaloniki, and the Manousogiannakis site in Patras—have been designated for the construction of 2,000 residential units.
According to the proposed allocation, 25% of these units will be made available to Armed Forces personnel, addressing genuine housing needs in a sector characterized by frequent relocations. The remaining 75% will be offered to citizens who do not own a primary residence, with priority given to socially vulnerable groups.
In addition to economic measures, the government has also announced an institutional reform. The responsibilities for building inspections and the issuance of construction permits will be transferred from the Municipal Urban Planning Services (YDOM) to the public company “Ktimatologio S.A.” The objective is to eliminate inefficiencies and corruption, while improving transparency in the permitting process. This reform, when combined with the completion of the National Cadastre, aspires to address long-standing structural deficiencies in urban planning and land use administration.
