New Tax Reductions on Rental Income – What Property Owners and Tenants Need to Know

Until now, rental income has been taxed at three rates: 15% for annual income up to €12,000, 35% for income between €12,001 and €35,000, and 45% for income above €35,000. From 2026, however, the brackets will be reshaped with the addition of a new intermediate tier. Income up to €12,000 will remain taxed at 15%, but from €12,001 to €24,000 the rate will drop to 25%. Income between €24,001 and €35,000 will be taxed at 35%, while anything above €35,000 will continue to face the 45% rate.

In practice, this adjustment means significant relief for landlords with mid-range earnings. For those declaring rental income between €15,000 and €20,000 a year, the annual tax bill will fall by around €300 to €800. The government’s aim is to make taxation fairer while reducing the incentive for undeclared rentals, particularly in the booming short-term rental sector.

Tenants also stand to benefit. By easing the financial pressure on owners, the government hopes to encourage more landlords to declare their properties and place them on the market, increasing the supply of available housing. At the same time, a one-month rent refund has been promised as direct support to tenants, to be paid out by the end of November 2025.

For property owners and investors, the new regime should be carefully factored into planning. The 2026 tax return, covering income earned in 2025, will still be calculated under the existing system. It will be the 2027 tax return, based on 2026 income, that will for the first time reflect the more favorable rules. This change is expected to impact not only traditional long-term leases but also tourist rentals such as Airbnbs, villas, and serviced apartments.

The bottom line is clear: Greece is moving toward a more equitable system of rental taxation, offering meaningful savings for middle-income landlords while at the same time incentivizing greater transparency in the rental market. With the measures set to take effect in 2026, both property owners and tenants should begin preparing for the transition now.