The government submitted the 2026 draft budget to Parliament with 2.9 billion euros in fiscal measures, including interventions announced at the Thessaloniki International Fair (TIF) 2025 and earlier actions. Officials said the plan creates additional fiscal space for 2027.
A major reform of the income tax scale anchors the package, with the government saying it will ease family budgets by 1.2 billion euros in 2026 and by another 400 million euros in 2027. The changes cover employees, pensioners, farmers and freelancers, with added relief for families with children and people up to 30 years old. Authorities expect the wider set of measures to increase annual real growth in 2026 by 0.6 percentage points of GDP.
Other interventions for 2026 include the gradual abolition of the personal difference for pensioners, lower income tax for property owners, a 30% cut in subsistence allowances, salary changes for the Armed Forces and the Security Forces, a 30% Value Added Tax reduction on eligible border islands and exemptions from minimum income rules for new mothers who work as freelancers. Settlements with up to 1,500 residents will receive ENFIA cuts before the tax is abolished in 2027.
The minimum wage will rise in April 2026, with the government targeting 950 euros by April 2027. Housing policies already in place include tax incentives for long-term leases between September 8, 2024, and December 31, 2025, and a ban on registering new short-term rentals in parts of central Athens. Rent support will begin in November 2025.
New housing steps for 2026 include extending tax exemptions for vacant properties that enter long-term leases, creating a 25% intermediate tax rate for rental income between 12,000 and 24,000 euros and keeping the VAT suspension on new buildings until the end of 2026. Restrictions on new short-term rentals in three Athens districts will also continue.
Starting January 1, 2026, VAT will drop by 30% on eligible islands in the North Aegean, the regional unit of Evros and the Dodecanese islands. Reforms to subsistence documents include lower coefficients for housing costs and new emissions-based calculations for cars registered after November 1, 2010.
Public servant measures planned for 2026 include a horizontal wage increase, payroll reforms for the Armed Forces and the Security Forces and higher allowances for Foreign Ministry and prison staff. Other steps include abolishing the 10% pay-TV fee in January 2026, raising hoplite compensation, launching the Drug Innovation Fund in January and granting income tax exemptions to foundations starting with the 2026 tax year. Insurance contributions are expected to fall further in 2027.
Officials said the interventions aim to strengthen income, support households and maintain fiscal discipline.