At the Thessaloniki International Fair, Prime Minister Kyriakos Mitsotakis revealed a €1.6 billion tax-cut package that will take effect with the 2026 budget. Branded as the biggest tax reform in half a century, the initiative aims to ease the financial pressure on households and make Greece more attractive for workers, families, and international residents.
For expats and foreign residents, these reforms could have meaningful implications — especially if you are working in Greece, raising a family here, or considering buying property in the islands or countryside.
Key Tax Changes in Greece for 2026
- A 2-point income tax rate cut across most brackets.
- Zero income tax for low-income families with four or more children.
- Young expats and foreign workers benefit: under twenty-five, no tax on annual income up to €20,000; under thirty, reduced income tax rates.
- Middle-income earners will see the 44% bracket lowered to 39% for incomes between €40,000 and €60,000.
- Property tax (ENFIA) cut in half in villages under 1,500 residents from 2026, and fully abolished in 2027.
- Lower VAT on Greek islands: a 30% cut on remote islands with fewer than 20,000 residents — standard VAT drops from 24% to 17%, reduced rates from 13% to 9%.
What These Tax Cuts Mean for Expats in Greece
Tax Residency for Foreigners in Greece
These changes apply only to Greek tax residents. If you are a non-resident earning income in Greece, such as rental income or seasonal work, you may not benefit unless you switch your tax residency.
Special Expat Tax Regimes in Greece Remain
- The foreign pensioners’ scheme allows retirees to pay a flat 7% tax on foreign pensions for 15 years if eligibility conditions are met.
- The Non-Dom or High-Net-Worth program lets you pay €100,000 flat annually on non-Greek income if you invest €500,000 in Greek assets and meet residency requirements.
These programs remain untouched. The new cuts will mainly affect expats employed in Greece or freelancers taxed under the standard Greek income tax system.
Young Professionals and Digital Nomads
Expats under twenty-five working in Greece could enjoy a zero tax rate on the first €20,000 earned. This makes Greece a stronger competitor for digital nomads, seasonal workers, and young professionals looking for a base in Europe.
Property Tax Relief for Foreigners in Greece
For expats interested in buying a home, rural and island properties are becoming more attractive. With ENFIA reduced and eventually eliminated in small villages, and with cheaper goods and services on remote islands due to lower VAT, the overall cost of living will decrease. This shift could attract more foreign buyers and long-term residents away from Athens and Thessaloniki toward the countryside or islands.
Final Thoughts
While these reforms are primarily aimed at Greek citizens, foreigners living, working, or retiring in Greece can also benefit — provided they align their tax residency and personal situation accordingly. For many expats, especially younger workers and families, the cuts represent a real improvement in net income and day-to-day affordability.
