The changes are outlined in the new tax bill, which was put into public consultation on Tuesday by the Minister of National Economy and Finance, Kyriakos Pierrakakis. The draft bill incorporates provisions for the comprehensive reform of income tax, the VAT and ENFIA reductions announced by the Prime Minister at the Thessaloniki International Fair, as well as the planned salary increases for uniformed personnel and public sector employees in 2026.
Under the new framework, the "deemed" taxable income for properties, vehicles, and boats will be significantly reduced. This will make it easier for taxpayers to cover the deemed income with a lower declared income, thus relieving thousands of taxpayers from additional tax burdens they have faced until now.
According to the draft law, the changes to the deemed taxation system for households will take effect immediately for income earned from January 1, 2025, and will be reflected in tax assessments issued in the spring of 2026.
Key Changes:
The "annual deemed living expenses," as they are officially termed, are activated when a taxpayer’s declared income is lower than the deemed income calculated by the tax authorities based on assets such as real estate, cars, swimming pools, boats, or other services owned, which incur related maintenance costs. The Income Tax Code imposes additional tax, calculated on the difference between declared and deemed income.
After decades of the same system, a rationalization is now underway. The new regime will reduce the "deemed" tax for residences by 30% to 35% for all taxpayers. The deemed taxes for cars with new anti-pollution technologies (registered after November 1, 2010), as well as for boats, will also be reduced by up to 70%. Additionally, dependent children with the same income will be exempt from the minimum deemed expense of €3,000.
Specifically:
1) Housing
The current system has led many taxpayers to face high deemed taxation, particularly when actual income was low (e.g., in cases of inheritance). Unlike the property tax (ENFIA), deemed taxation does not affect the property owner, but the person living in the property. This means that tenants are also taxed based on the size and location of the property.
Under the new bill, the deemed living expenses for residences will decrease:
By 30% for properties in areas with a Zone Price below €2,800 per square meter. For homes up to 80 m², the rate will drop from €40 to €28 per m², reducing the corresponding deemed expense from €3,200 to €2,240 (-30%). For properties of 120 m², the deemed expense will decrease from €5,800 to €4,040.
For properties in areas with a Zone Price between €2,800 and €4,999 per m², the deemed expense will increase by 30% instead of 40%. As a result, the total deemed expense reduction will be 35%. In areas where the Zone Price exceeds €5,000 per m², the deemed income will increase by 58% instead of 70%, resulting in a 35% reduction in the deemed expense.
For detached houses, the 20% increase remains but will be applied to the new, reduced deemed expenses. The 50% discount for secondary residences will also continue to apply to the new values.
2) Private Cars
For vehicles manufactured after 2010, the entire system for calculating deemed expenses will change: taxes will now be based on both engine displacement and CO2 emissions, rather than just engine size. Currently, cars are subject to deemed expenses based solely on engine displacement.
In addition, a reduction in the amount of deemed tax will be applied depending on the vehicle's age—30% for cars aged 5-10 years and 50% for vehicles older than 10 years. Since maintenance costs are not necessarily higher for newer cars than for older ones, the current system has discouraged the purchase of newer cars under 10 years old. The new system will work as follows:
A new scale based on CO2 emissions (for vehicles registered from 1 November 2010 onward):
The new system will result in a 70% reduction for new vehicles, a 30% reduction for vehicles aged 5-10 years, and a 50% reduction for vehicles over 10 years old. For vehicles emitting up to 122g of CO2 per kilometer, the deemed expense will be €2,000, with higher emissions resulting in varying amounts according to the emissions scale (30-60 euros per gram). The reduction is more pronounced for vehicles older than 10 years, as the new deemed taxes will be calculated with a 50% reduction from the current rates.
For electric vehicles with zero emissions, if the retail price before taxes does not exceed €50,000, the deemed expense will remain zero. For more expensive electric vehicles, the deemed tax will be limited to €2,000 per year, down from the current €4,000.
3) Recreational Boats
For boats, the deemed expense will decrease based on the age of the vessel—by 15% if more than 5 years have passed since the boat was first registered, or 30% if more than 10 years have passed. Under the new system, the deemed expense for newer boats will also decrease by 30%, as maintenance costs are not necessarily higher for newer vessels.
Additionally, the annual deemed expenses for sailing boats will be reduced by 50%, and the same reduction will apply to recreational boats that have been entirely constructed in Greece from wood in traditional Greek boat-building styles (such as "trechantiri," "varkalas," "perama," "tserniki," and "liberty").
This reform aims to improve fairness in taxation, promote environmental sustainability, and support taxpayers in maintaining financial balance, particularly in cases where declared incomes are modest.
