Tax Updates: November 20th 2025

The recent Law 5246/2025, titled “Tax Reform for Demographics and the Middle Class - Support Measures for Society and the Economy” includes numerous tax provisions, mainly for individuals. We set out below the most significant of these provisions:

Reduction of personal income tax (effective from tax year 2026)

The tax brackets and rates applicable to the taxation of income earned by individuals from employment, pensions and business activities, have been revised.

For comparison purposes we present below the tax scale that was applicable before the introduction of the new law.

Moreover, the new law provides for further reductions of tax rates per income bracket, depending on the number of dependent children that the taxpayer has or the age of the taxpayer. Specifically, it is stipulated that the tax rate for the first two brackets, i.e. for taxable income up to EUR 20 000, is zero (0) for taxpayers up to twenty-five (25) years old, and nine percent (9%) for taxpayers in the age group between twenty-six (26) and thirty (30) years old.

Reform of the tax scale for real estate income (effective for income earned as of 1/1/2026)

The tax scale applicable to individuals’ income from real estate is being revised. An intermediate tax rate of 25% is introduced for annual income exceeding EUR 12 000 and up to EUR 24 000.

In addition, the threshold for the third tax bracket is increased by

EUR 1 000, so that it now applies to income up to EUR 36 000 instead of the previous limit of EUR 35 000.

For comparison purposes we present below the tax scale that was applicable before the introduction of the new law.

Extension of incentives for electronic payments

The tax incentives (introduced in 2022 for the first time), for the use of electronic means of payment in transactions by individuals in certain sectors (e.g. healthcare, housing, recreation, etc.) are extended to also apply for the tax year 2026.

Reduction of minimum imputed expenses for residences, cars and boats and abolition of minimum imputed expense for dependent children (effective from tax year 2025)

Significant reductions have been introduced to the minimum annual imputed expenses of individuals in relation to their residences (in which case the reduction ranges from 30% to 35%), as well as for private cars and boats. Furthermore, the annual minimum imputed expense of EUR 3 000 for dependent children, who have own income, is abolished.

Expansion of the tax exemption incentive for long-term rental income (effective for rentals concluded as of 11/11/2025)

Income of individuals arising from the long-term rental of residences up to 120 sq.m. (increased if the taxpayer has dependent children) is exempt from income tax for 36 months after the conclusion of the relevant lease agreement, assuming certain conditions are met. Specifically, the lease agreement must have a duration of at least three years and must be signed between 8 September 2024 and
31 December 2026. In addition, for the three previous tax years (or for the years 2022 and 2023 if the lease is concluded in 2024), the property must have been declared as vacant or not declared as leased/owner-occupied/granted for use, or must have been used exclusively for short-term rental (e.g. Airbnb) during the tax year preceding the signing of the lease agreement. It is worth noting that the exemption ceases to apply if, within the 36-month tax exemption period, the property becomes vacant or is used for short-term rental; however, the exemption may continue if the property is leased again under a long-term lease.

Extension of VAT suspension on real estate until 31 December 2026 (effective from 1/1/2026)

The option for building constructors to select VAT suspension on unsold properties is extended until 31 December 2026 (instead of 31 December 2025). Moreover, VAT suspension already granted and currently in force until 31 December 2025, is also extended until
31 December 2026.