Greece’s new State Budget for 2026, submitted to Parliament by Finance Minister Kyriakos Pierrakakis, introduces a comprehensive package of permanent income-support measures targeting more than 5 million Greek households. Once fully implemented, these initiatives will total €3.2 billion annually beginning in 2026.

The government says the interventions focus on the areas of greatest need: housing, young people, and Greek families, with both new policies and previously legislated measures now appearing for the first time in the State Budget.

Key Measures Included in the 2026 Budget

€1.76 billion in new measures from January 1, 2026

Announced at the Thessaloniki International Fair (TIF), these measures mostly consist of:

• Permanent tax cuts worth €1.2 billion
• Salary and allowance increases across various sectors

€1.508 billion in additional permanent benefits

These include:

• Rent refunds
• The €250 annual allowance for pensioners
• Other benefits legislated after January 1, 2025, now incorporated into the 2026 Budget

1. Middle Class and Families: Major Tax Relief

The centrepiece of the Budget is a broad reform of income taxation.

After years of elevated tax burdens, especially for middle-income earners and families with children, the government is implementing a major correction.

Across-the-board income tax reduction

From 2026, all taxpayers earning over €10,000 annually will see their tax rate reduced by two percentage points.

Example:
An employee, farmer or self-employed person earning €20,000 will pay 20% instead of 22%, saving €200 per year.

Significant savings for families

• 1 child: tax drops to 18% → €400 saved
• 2 children: 16% → €600 saved
• 3 children: 9% → €1,300 saved
• 4+ children: 0% up to €20,000 → up to €3,100 saved (or €4,000 if self-employed)
  If both parents work, each receives the same benefit.

Tax-free income for young people

• Up to age 25: no tax on income up to €20,000
• Taxpayers aged 26–30: automatic €1,300 reduction
  Benefits scale further for incomes between €30,000 and €60,000.

Additional tax relief

• Reduced “imputed income” from April 2026 (average cut: 30%)
• Exemptions for dependent children with their own income
• Special relief for self-employed parents, small settlement professionals, and school canteen operators

2. Pensioners and Public-Sector Employees

End of the “personal difference”

Starting April 2026:

• Pensioners will receive 50% of any increase directly, regardless of personal-difference calculations
• Full abolition of the mechanism in 2027
  Combined with annual adjustments (inflation + GDP), pensioner incomes will significantly rise.

€1.153 billion in pension spending increases

Covers annual rises, abolition of the personal difference, and faster processing of new pensions.

Public-sector salary improvements

• Wage progression returns after more than a decade
• Public-sector salaries will rise in line with increases to the private-sector minimum wage
• Special payroll adjustments from January 1 for ministry staff, scientific personnel and uniformed employees
• Basic soldier stipend increases from €8.80 to €50–100 per month

3. Tackling the Housing Crisis

To increase rental supply and stabilize prices, owners of vacant properties receive strong incentives.

Key housing measures

• Three-year full income-tax exemption for owners who open vacant homes for long-term rent
• Additional benefits for renting larger homes to families
• 10-point reduction in rental-income tax for earnings between €12,000–€24,000 (from 35% to 25%)
  → Savings up to €1,200 annually
• Extension of the income-tax deduction for property renovations
• Measures align with the rent-refund program, expected to boost accurate rental declarations

4. ENFIA Abolished in Villages

Property tax (ENFIA) will be:

• Reduced by 50% in 2026
• Fully abolished in 2027
  This applies to settlements under 1,500 inhabitants (1,700 in border regions), benefiting nearly 2 million owners across 12,000+ villages.

5. Everyday Cost Relief

Lower VAT on 19 Aegean islands

A 30% VAT reduction applies in 2026 to:

• All goods and services
• Islands in the North Aegean, Samothrace and the Dodecanese with populations up to 20,000
  This begins January 1, 2026.

Cheaper subscription TV

The 10% special tax on subscription television is abolished nationwide.