The tax reform presented by Prime Minister Kyriakos Mitsotakis at the Thessaloniki International Fair (TIF) brings reductions worth hundreds and in many cases over a thousand euros annually. Property owners with rental income will benefit from a new intermediate tax rate of 25%, while households burdened by imputed income (“tekmiria”) will see their tax base reduced by 30%. At the same time, ENFIA will be eliminated for first homes in villages starting in 2027, and VAT on remote islands will be cut by 30%, easing the cost of living.

Rental income

From 2026, a longstanding injustice will be corrected. Currently, income up to €12,000 is taxed at 15%, but every euro above that threshold is immediately taxed at 35%, without any middle rate. This creates a sharp tax “jump” that disproportionately penalizes small landlords.

With the new 25% bracket for income between €12,001–24,000, taxation will become smoother and fairer.

• Example: A landlord earning €15,000 currently pays €5,250 in tax. From 2026, that drops to €4,350 – a saving of €900.
• At €20,000 income, the tax burden falls from €6,650 to €5,250, saving €1,400.
• Even at €25,000, where part of the income still falls under the 35% bracket, the tax is reduced from €8,400 to €7,750 – a saving of €650.

Combined with the permanent refund of one month’s rent every November, landlords will be incentivized to declare their actual earnings. The prime minister noted that today’s average declared rent of just €255 raises serious questions about the reliability of reported figures. If compliance improves, further tax relief for property owners will be considered.

Imputed income

From 2026, imputed income values will be reduced by 30%, relieving around 500,000 taxpayers.

• A 100 m² residence currently imputed at €4,000 will drop to €2,800.
• A 1,600 cc car, today imputed at €5,200, will fall to €3,640.

For a typical household with a home and a car, total imputed income will decrease from €9,200 to €6,440, resulting in savings of up to €1,200 in imputed tax. For larger assets, savings could reach €1,600.

Regional measures

The regions also benefit:

• ENFIA on first homes in villages with up to 1,500 residents will be cut in half in 2026 and abolished entirely in 2027.
• On border islands with fewer than 20,000 residents, VAT will be reduced by 30%. Currently, this regime applies to five islands but will now extend to dozens more, including Lemnos, Samothraki, Kastellorizo, Karpathos, Fournoi, and smaller islands in the Dodecanese and North Aegean. This measure will reduce living costs and support local economies.

Housing policy

To address housing supply and price pressures, the prime minister also announced a package of measures:

• Extension of the freeze on new short-term rental licenses in Athens’ three largest districts.
• Launch of “My Home 2” program with low-interest loans for young people.
• Expansion of “Renovate & Rent” program, offering incentives for owners to upgrade and lease unused properties.
• Introduction of “social land-for-housing” exchanges, where private landowners and institutions can trade land for residential developments benefiting young families.
• Development of 2,000 state-owned apartments in Moschato (Athens), Ziakas (Thessaloniki), and Manousogiannakis (Patras) army camps. Of these, 25% will go to Armed Forces personnel and 75% to citizens without a first home.

Tables

Imputed Income

Tax on Rental Income