Greek budget 2026: Permanent income support for 5 million households

The package of interventions being incorporated for the first time into the State Budget focuses where the need is greatest: housing, the younger generation and supporting the Greek family. According to the accompanying Explanatory Report, the 2026 State Budget includes:

New measures worth €1.76 billion announced at the Thessaloniki International Fair (TIF) which will take effect on January 1, 2026. These mainly concern permanent tax cuts (€1.2 billion), as well as salary or allowance increases.
Other permanent measures and benefits totaling €1.508 billion, legislated after 1 January 2025 but not previously planned — and therefore never included — in the State Budget. These are being registered in the 2026 Budget for the first time, although they start applying this year, such as the rent refund or the €250 allowance for pensioners that will be paid to millions of beneficiaries from the end of November this year and annually thereafter.
Behind the numbers, the package provides major changes for workers, professionals, pensioners, farmers and property owners, which unfold as follows:

1. Middle class and families: ending tax “hostage status”
At the heart of the 2026 interventions is income taxation. “Lowering tax rates means greater benefit for employees, pensioners, farmers and the self-employed with every future increase in their earnings,” the report notes.

After fifteen years of over-taxation of the middle class and families with two or more children (as shown in the OECD’s annual “Taxing Wages” reports), the state acknowledges that the tax burden on these groups was disproportionately high and must be reduced, leading to substantial correction.

From 2026, tax rates are cut horizontally by two percentage points for middle incomes above €10,000 per year. For example, an employee, farmer or self-employed person earning €20,000, currently taxed at 22%, will now pay 20% — saving €200 a year on their 2026 income.

The difference is more pronounced for families:

parents with one child: 18% instead of 22%, saving €400
parents with two children: 16% instead of 22%, saving €600
parents with three children: 9% instead of 22%, saving €1,300
families with four or more children: effectively no income tax up to €20,000, saving €3,100 (or €4,000 if the parents are self-employed)
if both parents work, both receive the same benefit — meaning €800 up to €8,000 in savings in the €20,000 income example.
Young people up to 25 also receive strong incentives to join the workforce, as the state will not tax income up to €20,000 at all. They save up to €3,100 annually, or €4,000 if self-employed. Taxpayers aged 26–30 automatically save €1,300. Benefits are even larger for higher incomes between €30,000 and €60,000.

Employees and pensioners will see the benefit immediately as an increase in their monthly take-home pay, while the self-employed will see lower prepayments in summer 2026 and final tax reductions in 2027.

Additional benefits go to the self-employed through a three-year exemption from the minimum income for new mothers, and tax relief for groups such as school canteen operators or those working in settlements under 1,500 inhabitants.

Nearly half a million taxpayers will also get relief from “imputed income” taxation: from April 2026, living-expense imputed values for housing, cars, etc. will drop by an average of 30%. Dependent children with their own income are also exempt from the minimum objective expense — correcting decades-long distortions.

2. Pensioners and public-sector workers

For hundreds of thousands of pensioners, 2026 brings an end to the “personal difference” in their pensions. Until now, 650,000 pensioners saw increases only on paper in their pension statements.

From April 2026, 50% of any pension increase will be paid directly regardless of personal difference, and from 2027 the mechanism will be abolished entirely. Combined with regular increases based on GDP and inflation, pensioner incomes are substantially strengthened. Spending for main pensions will rise by €1.153 billion in 2026 due to annual adjustments, the gradual abolition of the personal difference and the faster processing of new pensions.

Working pensioners will no longer face additional contributions or the Solidarity Contribution of Pensioners (EAS) due to employment.

In the public sector, where salaries have been stagnant for more than a decade, wage progression returns. From April, all public-sector salaries will rise based on the private-sector minimum wage — meaning any increase in the private sector automatically raises public-sector pay.

Benefits linked to the minimum wage will also increase.

Moreover, from January 1, specific categories such as ministry

employees, scientific staff and uniformed personnel will get special payroll adjustments. Even basic soldiers will see their monthly stipend rise from €8.80 to €50–100 — the first increase in decades.

3. Housing: incentives to open “closed” homes

The housing crisis is addressed with incentives to owners to increase the supply of rental properties and stabilize rents.

Incentives for owners who open up a vacant home for long-term rental are extended beyond 1 January 2026. They will receive full income-tax exemption for three years, with special provisions for those renting larger homes to large families.

The income-tax reduction for building-upgrade expenses is extended into 2026. The tax on rental income between €12,000 and €24,000 is lowered by 10 percentage points — from 35% to 25% — encouraging owners to rent properties they otherwise kept empty to avoid high taxes. This translates to up to €1,200 in annual savings.

The measure complements the rent-refund scheme, which is expected to encourage more accurate rental declarations (currently averaging only €250 per month to avoid high taxation).

4. Ending ENFIA in villages

To support rural areas, ENFIA property tax on homes in settlements with fewer than 1,500 inhabitants (or 1,700 in border areas) is cut by 50% in 2026 and abolished entirely in 2027. The measure affects nearly 2 million property owners in more than 12,000 settlements.

5. Everyday-life measures

The budget addresses smaller but significant everyday costs in regional areas.

VAT is reduced by 30% in 2026 for 19 Aegean islands on all goods and services. Residents and visitors in North Aegean islands, Samothrace and the Dodecanese (with populations up to 20,000) will see lower prices from January 1, 2026.

Nationwide, subscription television becomes cheaper as the 10% special tax is abolished.