For the first time in nearly twenty years, the government is moving — retroactively from this year — to drastically reduce presumptive living expenses, cutting them by 30% for residential properties and up to 73% for cars.
The reform aims to ease the tax burden on nearly 480,000 taxpayers who find themselves each year caught in the “trap” of imputed income.

The measure forms part of the broader tax reform package announced at the Thessaloniki International Fair (TIF) in September and is included in the draft bill presented for public consultation on Tuesday by Minister of Economy and Finance Kyriakos Pierrakakis, ahead of a parliamentary vote in the coming weeks.

Three Axes of Intervention

The overhaul of the presumptive living expenses framework is threefold, providing for:

• A 30% reduction in imputed income for residential properties,

• A sharp cut for cars based on engine size and CO₂ emissions, and

• Exemption of dependent children with their own income from the minimum objective expenditure of €3,000 — a long-standing demand, particularly for large families.

According to the bill, the relief measures will take effect immediately, applying to income earned from 1 January 2025, which will be declared and taxed in spring 2026.

Housing: 30–35% Reduction

“Objective living expenses” — as the notorious presumptive expenses were renamed 19 years ago — apply when the taxpayer’s declared income falls short of the amount imputed by the tax authorities, based on ownership or use of real estate, vehicles, swimming pools, boats, and other assets.

The difference between declared and imputed income is taxed, often leading to significant additional liabilities — particularly for those renting or living in high-value properties.

The new reform reduces the marginal rate for all housing categories by 30%, easing the burden substantially.
For example:

• An 80 sq.m. home’s imputed income will fall from €3,200 to €2,240, saving tax on €960 of income.

• For a 120 sq.m. home, the reduction reaches €1,760 per year, from €5,800 to €4,040.

High-Value Areas See Even Greater Relief

Properties located in high-zone-value areas — where additional surcharges apply — stand to benefit the most.
The reduction can reach 35%, with the surcharge cut from 40% to 30% in areas priced between €2,800 and €4,999 per sq.m., such as Glyfada, Chalandri, and other northern or southern suburbs.

For instance, a 120 sq.m. home in such an area will see its imputed income drop from €8,120 to €5,252, a €2,868 annual reduction.
In even more expensive “VIP” zones, such as Kolonaki, Psychiko, Ekali, and the Athens Riviera, the surcharge is reduced from 70% to 58%, delivering up to 35% lower taxable income.

Cars: “Green” Reductions for Newer Models

For vehicles, a hybrid calculation system is being introduced, combining engine capacity and CO₂ emissions, with the largest benefits going to eco-friendly and small-capacity cars.
A minimum annual presumption of €2,000 is set for cars up to 1,200 cc, but only for vehicles registered after November 1, 2010.

Examples:

• A Toyota Corolla 1.8 Hybrid (99 g/km CO₂) sees its presumptive income fall from €7,600 to €2,000 — a 73.7% reduction.

• A Honda Jazz 1.5 Hybrid (102 g/km) drops from €5,800 to €2,000, a 65.5% cut.

• A Fiat 500 1.0 (999 cc) sees its presumption halved, from €4,000 to €2,000.

• A BMW 116i (1,499 cc, 129 g/km) decreases from €5,800 to €2,210 (–61.9%), while a Mercedes A200 (1,332 cc, 133 g/km) falls from €5,200 to €2,330 (–55.2%).

• Even larger models, like the Audi A4 35 TFSI (1,984 cc), drop from €8,800 to €2,450 (–72.2%), and the Audi Q3 35 TDI (1,968 cc) from €8,800 to €2,645 (–69.9%).

Who Benefits

The reductions benefit approximately 477,000 taxpayers currently burdened by the gap between declared and imputed income — primarily middle-class households, homeowners, renters, and families with one or more cars.

The total fiscal cost of the measure is estimated at €40 million per year, as part of the €2.7 billion budget for the 2025 TIF package.
The reduction applies from fiscal year 2026 and will be permanent and recurring.

Additional Reforms and Broader Context

Beyond the reductions, the bill also exempts dependent children with income from the minimum objective expenditure of €3,000 previously imposed per individual.
This change means families with working adult children will no longer face extra imputed income simply because their children hold separate tax IDs.

The overhaul accompanies a broader revision of the income tax scale — benefiting around 4 million taxpayers — along with a cut in ENFIA for small communities and the introduction of a new 25% intermediate rate on rental income.

Altogether, the measures aim to strengthen middle-class purchasing power while remaining within the government’s fiscal targets.