A new wave of income increases and tax changes, mainly through 12 favorable measures, with reductions and abolitions of taxes starting from the radical reform of the income tax scale and extending to changes in real estate, imputed income, and VAT reductions. The beneficiaries approach 4,000,000 employees, pensioners, young workers, professionals, property owners and renters, car owners, and many others.

The biggest upheaval concerns the new income tax scale, with a radical overhaul for employees, pensioners, farmers, and self-employed individuals with annual incomes above 10,000 euros, but also for new taxpayers, through reductions in rates from 2 up to 22 percentage points. A deep change that does not remain only on the tax return but passes directly to monthly wage withholdings every month.

With the new data, January 2026 starts with a reduction in tax withholdings on salaries and pensions exceeding 700–800 euros net, with the difference immediately reflected in the net payment amount.

However, all taxpayers benefit in multiple ways from many other measures, especially young people, parents with children, and the middle class.

New tax scale for parents with children

On New Year’s Day, the income tax scale in effect until December 31, 2025, changed. All employees and pensioners with income over 10,000 per year will receive a 2-point reduction in taxation.

However, the scale becomes significantly more favorable as the number of dependent children increases, especially for incomes between 10,000.01–30,000 euros, which have the greatest impact on daily life.

Specifically:

• For all those with 1 child, tax rates are further reduced by 2 percentage points compared to those without dependents. The benefit rises to 4% compared to the tax paid last year.
• For taxpayers with 2 children, an additional reduction of 4 percentage points is provided (i.e., 6% less than last year).
• For taxpayers with three or more children, the interventions are stronger, as they also cover higher brackets. Indicatively:
• For a taxpayer with 3 dependent children, the rate decreases by 13 points, from 22% until yesterday, to 9% for the income portion 10,000.01–20,000 euros, and from 28% to 20% for the portion 20,000.01–30,000 euros. Reductions also apply to higher brackets, covering middle-class incomes.

For an income of 30,000 euros, the taxpayer saves 2,100 euros per year, i.e., an additional 150 euros net per month in salary due to smaller withholdings (or 175 euros if paid on a twelve-month basis).

• For a taxpayer with four children, taxation is zero for the first 20,000 euros of income, while reductions are also foreseen in the next brackets. For an income of 30,000 euros, they save 4,100 euros per year, i.e., 221 euros net per month due to smaller withholdings (or 258 if paid on a twelve-month basis).
• For five or more children, an additional reduction is provided in the 20,000.01–30,000 euros bracket, by 2 percentage points for each child beyond the fourth.

Tax-free for young people up to 25 years old

The new scale also innovates by focusing for the first time on young people. For those in the first years of their careers, the tax interventions have an immediate impact:

• For taxpayers up to 25 years old, tax is completely zero up to 20,000 euros: 0% withholding instead of 9% on the first 10,000 euros and 0% instead of 22% on 10,000.01–20,000 euros. Thus, a young worker will have no tax withholding on the first 20,000 euros until the age of 25. They automatically gain up to 2,480 euros per year, i.e., 177 euros extra net per month in their salary (or 207 euros if paid on a twelve-month basis).
• For ages 26–30, the relief is smaller but still significant: they are exempt on the first 10,000 euros and taxed at 9% instead of 22% for 10,000.01–20,000 euros. In practice, a 30-year-old employee gains 1,300 euros, i.e., 92 euros per salary received (or 108 euros on a twelve-month basis). This is why the largest reductions in withholdings from January 2026 are expected for young workers up to 30 years old with net earnings above 700 euros per month.

New increase in the minimum wage and for the public sector

These changes for employees and pensioners mean even more money in their pockets when they receive annual salary increases for the new year.

From spring 2026, a new increase in the minimum wage is expected, with the latest information converging on an increase of at least 35–40 euros per month from April. This increase concerns the nominal amount (gross). However, the new scale implies lower withholdings and a higher net amount than they would have received without these changes.

Specifically, the basic salary is estimated to reach 915–920 euros, from 880 euros today, with the government’s goal to reach 950 euros by 2027. This increase directly affects everyone paid at the minimum wage but indirectly affects those slightly above it. In many companies, the minimum acts as a base for salary scales.

The increase of the minimum wage in the private sector will also push up all public sector wages. Additionally, a range of allowances and benefits calculated based on the minimum wage or daily wage also increases.

Up to three “rental refunds”

In 2026, the measure of rental refunds is expanded. Especially teachers, doctors, and nurses in the public sector serving in regional areas (outside Athens–Thessaloniki) who rent a residence will receive double the refund in November 2026. Earlier, in the first quarter of the year, they will receive an additional “rental refund” for 2025, in addition to the one received last November, as the measure is announced to apply retroactively from this year.

Tax relief for rentals

For property owners renting out properties, a reduction of the rental tax rate is provided for the “middle” income segment, from 12,000.01 to 24,000 euros, from 35% to 25%. This is a substantial relief for owners with middle incomes, receiving one or more rents.

This reduction applies to rents received in 2026 and taxed in 2027, so it will not be immediately visible in 2026, but in the next tax settlement. However, owners can immediately budget the benefit, possibly putting another property in long-term lease or adjusting the requested rent in contract renewals to share the benefit with tenants – if deemed appropriate. Additionally, the three-year exemption from income tax for owners renting long-term properties that were vacant or used for short-term rentals is extended to December 31, 2026, and improved. The exemption is not general but only applies to the income produced by the specific property and activates only if certain conditions are met.

The aim of the measure is to transfer properties from inactivity or short-term rentals to the long-term market. For this reason, if the tenant leaves, the tax exemption is not automatically lost, as long as the owner signs a new lease within the prescribed period. A special framework exists for public employee leases, especially in high-mobility and housing pressure areas, so that the benefit is not lost due to frequent relocations.

Who will pay less ENFIA

The new intervention concerns a 50% reduction of ENFIA for primary residences in settlements with up to 1,500 residents, except for the Attica Region (except the Islands Regional Unit). In some border areas, the limit rises to 1,700 residents. Residences with a taxable value over 400,000 euros are excluded. The measure affects about 1 million property rights in thousands of small settlements in the country.

Discounts for low incomes, full exemptions for families with three or more children or families with people with disabilities, and discounts for insured residences remain in effect. In 2026, a discount of up to 20% continues on ENFIA for homes insured against earthquakes, fires, and floods, with adjustment if the insurance duration is less than a year.

30% reduction in imputed income

After decades, imputed income changes in both amount and calculation method to reduce “artificial” income derived from property ownership.

For residences, imputed amounts are reduced by up to 30%, while large increases for high-value zones are limited. In practice, fewer owners will show income they do not actually have, affecting both taxation and access to exemptions or benefits.

For cars, the logic of “objective expenses” as calculated by the Tax Office changes completely. For vehicles registered from November 1, 2010, onwards, imputed income is no longer based on engine displacement but linked to CO emissions, just like road taxes. Low-emission cars, even with higher displacement, will weigh less for tax purposes, while overall reductions in imputed income range from 7% to 73.7% depending on the vehicle.

Reductions also apply to recreational boats, with a general 30% reduction for newer boats, while favorable rules for sailboats and traditional wooden boats are maintained.

VAT reduction on the islands

Immediately from the new year, all VAT rates are reduced by 30% on islands of the Northern Aegean, Evros prefecture, and the Dodecanese with populations up to 20,000, areas that in recent years have faced high living costs and additional burdens due to distance, transport, and limited market options.

VAT rates are set at 17%, 9%, and 4%, instead of 24%, 13%, and 6%, aiming to reduce pressure on basic goods and services and support both households and local businesses.

Eviction without courts

A new measure for greater protection of property owners, to encourage renting more vacant properties and lower rental prices, comes into effect: from January 1, 2026, a new procedure for issuing a Rental Return Order due to lease expiration without court recourse begins.

Owners will be able to request the return of their property almost automatically through certified lawyers, avoiding lengthy lawsuits that could take months or years. The regulation only applies when the contractual or legal lease term has expired and the owner does not want continuation. It does not cover nonpayment of rent or tenant misconduct, for which existing procedures still apply. In practice, it replaces lawsuits for property return due to lease expiration.

The procedure has specific steps. The owner must send a formal notice at least three months before the lease ends, stating they do not wish to extend and requesting the property’s return. If the property is not returned after three months, a certified lawyer may request a Rental Return Order, appointed impersonally and not chosen by the parties.

The order is not a court decision but an enforceable title issued based on documents proving lease expiration and compliance with the deadline. The tenant retains the right to appeal and may request an extension for serious reasons.

Execution is not immediate. A two-month period is provided from the order’s notification, ensuring a total timeframe of at least six months from the first notice to property return, without action or costs from the tenant.

The regulation does not allow early evictions for personal use or sale and maintains the minimum legal lease duration. The goal is to resolve a long-standing issue at lease expiration and reduce insecurity that kept many properties out of long-term rental.