Tax reductions are now entering their final phase and are expected to increase the incomes of millions of households from January 1, 2026—or, in many cases, even earlier.
Even before these changes are formally voted on, the special online application taxcalc2025.minfin.gr, launched a month ago by the Ministry of Finance, has received over 530,000 visits from taxpayers eager to calculate the personal benefits for themselves or their family members. The platform is particularly used by young adults, parents, salaried employees, professionals, and property owners, allowing them to see the impact of the upcoming changes in income taxation.
The benefits arise in multiple ways. The new law, titled “Tax Reform for Demographics and the Middle Class – Support Measures for Society and the Economy,” includes permanent tax reductions and exemptions worth €1.5 billion for 2026, alongside significant wage increases in the public sector.
Who Benefits the Most
All taxpayers will benefit from the new measures, including those who currently pay no income tax. Due to the projected nominal salary increases from 2026 onward, most individuals who are currently exempt will no longer remain untaxed.
This includes minimum wage earners, whose salary is set to rise steadily each year from €880 today to €950 by 2027. Immediately, over 4 million taxpayers are expected to see an increase in income due to a 2-percentage-point reduction in tax rates for incomes between €10,000 and €40,000, effective January 1, 2026.
Specifically:
- 10,000–20,000 €: rate reduced from 22% → 20%
- 20,000–30,000 €: rate reduced from 28% → 26%
- 30,000–40,000 €: rate reduced from 36% → 34%
Additionally, a new intermediate rate of 39% is introduced for incomes between €40,000 and €60,000, while the 44% rate applies only to very high incomes.
Wage Increases with Tax Cuts
Pensioners, public sector employees, and uniformed personnel will see the first benefits of income tax reductions as higher net wages in their January 2026 payroll, typically prepaid at the end of December.
The timing depends on each payroll office’s readiness to implement the new measures. If they cannot process the changes by December, the net benefit will be applied from January onward. Private sector employees will see a similar increase through reduced withholding taxes in their January payroll.
The overall benefit will be reflected in the income tax returns issued in spring 2027, with the final additional tax significantly lower than in previous years, particularly for self-employed professionals who do not have monthly tax withholding.
Families with Children Gain Up to €7,200
Families with children are among the biggest beneficiaries. For the first €20,000 of income:
- One child: rate drops from 22% → 18%
- Two childrenb: 16%
- Three children: 9%
- Four or more children: 0%
This applies to both parents if both are employed.
Example: A couple earning €25,000 each would save:
- No children: €600/year
- One child: €1,200/year
- Two children: €1,800/year
- Three children: €3,400/year
- Four children: €7,200/year
Zero Tax for 70,000 Young People Under 25
For the first time, an age-based criterion is introduced. About 260,000 young people up to 30 years old will either be fully exempt or pay minimal tax on income earned from January 1, 2026.
Specifically:
~70,000 young people ≤25 years with income ≤€20,000: zero income tax (currently taxed at 9–22%).
Ages 26–30: 9% tax on the first €20,000.
Example: A 24-year-old earning €15,000 annually currently pays €2,000 in tax. From January 1, 2026, they will pay nothing, saving €167/month, reflected automatically in payroll withholding.
New 25% Tax Rate on Rental Income
Property owners with annual rental income of €12,000–24,000 will now pay a 25% tax rate (instead of 35%). The 35% rate applies only to higher income brackets from 2026.
This measure aims to support thousands of landlords and reduce tax evasion, encouraging more property rentals. Additionally, one rental refund per year will be granted to 80% of tenants starting this year, in November.
Immediate implementation also applies a three-year income tax exemption for long-term vacant properties, benefiting large families and public servants in regional areas. The measure continues in 2026. The VAT suspension on new constructions is extended until December 31, 2026.
Reduction in Presumed Income
Around 500,000 taxpayers benefit from a 30–35% reduction in presumed income for homes and vehicles.
Vehicles registered after 2010: assessed based on emissions.
Dependent children with their own income: excluded from the €3,000 minimum presumed income, benefiting 477,000 taxpayers.
Presumed income for the primary residence reduced by 30%.
These reductions apply retroactively to 2025 income and will appear in tax assessments issued in spring 2026.
Support for Professionals
Self-employed individuals benefit in three ways:
Zero or reduced tax from January 1, 2026, for those ≤30 years old or with children.
~6,000 new mothers per year exempt from presumed income during the child’s birth year and the following two years.
Reduced minimum net income thresholds for businesses extended to small municipalities (<1,500 residents) and school canteen operators.
Electronic Payment Incentives Extended
In 2026, taxpayers continue to receive 30% tax credit on electronic payments up to €5,000/year, saving up to €3,200 for the most diligent.
Medical, dental, and veterinary expenses are counted double toward this threshold, further limiting tax evasion.
Additional Measures
The law also includes:
Special tax relief for public healthcare doctors.
Immediate salary increases for police, armed forces, foreign ministry officials, and graduates of five-year programs (polytechnics, etc.).
Full recognition of prior service and research work for researchers under contract.
Who Does Not Benefit
Individuals earning under €10,000 remain untaxed and gain no direct benefit.
Property owners earning less than €12,000/year from rents gain little, though many may declare actual rents due to the new incentives.
Even those excluded from direct tax benefits may see indirect gains from measures introduced in November 2025, including rental refunds, €250 annual allowance for low-income pensioners, and significant property tax (ENFIA) and VAT reductions, effective January 1, 2026, in the Aegean islands and 12,000 small towns on the mainland.
