The tax bill filed by the Ministry of Finance in the Parliament, with title “Tax reform for the demographic and the middle class – Support measures for society and the economy”is not a simple technical readjustment.
It’s about first major political and economic package of the second government term, which attempts to reshape the tax landscape and yes send a signal of support to the middle class and young people.
The total cost of the measures amounts to 1.76 billion euroswith main body them income tax deductions height 1.2 billion euroswhile including targeted reliefs for families, small professionals, residents of small settlements and islands.
The political message: relief and development
The choice of the time to table the bill – a few weeks before the table of the budget – is clear political imprint. The government is trying to reconnect with social strata pressured by punctuality and the rising cost of living, projecting a narrative of “fairer taxation” and “reinvestment of development in citizens”.
At Megaron Maximos they see it as reform-bridge:
a plan that it marries fiscal decompression with regional policywith the obvious aim of strengthening the social cohesion and to answer the demographic concerns.
The changes in five pillars
1 New income scale: less tax for young people and families
The new income scale provides lower rates for employees and pensioners, with additional reductions for young people up to 30 years old and families with children.
For them freelancers a corresponding adjustment is foreseen, while the on-calls of the State doctors are now taxable with 20% instead of 22%.
At the same time, electronic payment incentives are extended until 2026which have proven effective in combating tax evasion.
2 Tax breaks for families and the province
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New mothers are exempted from evidence for the year of birth or adoption and for next two yearsrecognizing the demographic as a national priority.
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Small professionals in settlements under the 1,500 inhabitants continue to enjoy special tax regimeaiming to keep local economies alive.
It’s about measures with a clear social and regional characterwhich seek to reverse the flight of young people and professionals to urban centres.
3 New rent scale – incentives for fixed leases
The new tax regime for real estate income creates an intermediate level 12,000–24,000 euros incl 25% rate instead of 35%, reducing the tax burden on small owners.
At the same time, the tax exemption for long-term leases properties that until now remained empty or operated as short-term.
The aim is twofold: to increase the supply of housing in the long-term market and to limit the explosive rise in rents in large urban centers.
4 ENFIA – The “doctrine” of decentralization
OR phasing out of ENFIA for dwellings in settlements up to 1,500 inhabitants (or 1,700 in Evros) is perhaps the most iconic measure of the bill.
The reduction by 50% in 2026 and the complete phase out in 2027 for main residences worth up to 400,000 euroshas and symbolic dimension:
encourages her return to the countryside and strengthens the cohesion of small societies.
5 VAT and investments: economic breath for the islands
OR 30% VAT reduction at islands of the North Aegean, Dodecanese and Samothrace constitutes development intervention with political significance, as it is connected with the strengthening insularity and her offsetting the increased cost of living.
At the same time, the suspension of VAT on unsold buildings until 2026, while it is enacted new framework of investment incentives with 100% discount on expenses and expedited licensing until 2028, in total 150 million euros.
Wage interventions and allowances
The Part C’ of the bill brings new payroll for the Security Forceswith salary cap equal to the basic salary of the Head of EL.AS., as well as allowance increases special duties.
The Part D’ concerns diplomats and prison officialswith adjustments to allowances and establishment new special duties allowance.
At Part E’is enacted annual grant of 11 million euros to the Hellenic Film Center and extension until December 1, 2025 of the mandatory acceptance of payments through IRIS.
The financial footprint
According to the figures of the Ministry of Finance, the measures will have multi-level fiscal impact:
| Measure | Annual cost (million €) |
|---|---|
| New Ensign Salary | 127 |
| Allowances of the Ministry of Foreign Affairs & correctional officers | 6,4 |
| Reduction of evidence | 40 |
| Abolition of ENFIA in villages | 38 (2026) – 75 (2027+) |
| VAT reduction on islands | 25 |
| Investment incentives (2026–2028) | 150 |
| Duty tax reduction & exemptions | 10 |
| Pay TV fee | 22 |
| EKK grant | 11 |
OR total loss of revenue reaches approx 1.76 billion euroswith the government estimating that it will offset by growth and increased consumption.
The next day in Parliament
The bill is introduced directly to the committees and expected to be voted on within the next few daysin order to enter into force from 1 January 2026.
The debates are predicted to be intense, as the opposition is expected to request specific provisions for equivalents and clear implementation schedule.
A “tax recovery” plan
The TIF bill, beyond the numerical figures, is one political statement of direction:
an effort redistribution of the tax burden, household relief and redefining the citizen-state relationship.
It is, in other words, the new government social contract for the next four years –
a bet that will be judged not only on numbers, but mainly on real relief to the citizens.