By John Q. Hosedrinker 
In a significant move, Greek Prime Minister Kyriakos Mitsotakis has revealed a €1.6 billion reform of the income tax system. This reform aims to strengthen the middle class through substantial cuts in income tax rates. Notably, families with four or more children will be exempt from income taxes on the first €20,000 of annual income. The policy is designed to combat Greece’s low birthrate.
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Greece Announces Tax Cuts Amid Record Surplus: The Greek government is making some bold moves. It’s quite a turnaround from the financial struggles they faced just a decade ago. Now, they’re announcing significant tax cuts, aiming to give their citizens a financial boost. This is all possible because of a substantial budget surplus, a result of measures taken to combat tax evasion and a strong economic performance. The goal is to reward growth and spread the benefits around.
No Property Tax on Primary Residences in Rural Areas: One of the most eye-catching measures involves property taxes. Specifically, residents in villages with populations of 1,500 or fewer will see significant relief. In 2026, they’ll pay only half the property tax, and in 2027 and beyond, they’ll be completely exempt on their primary residences. This is a direct incentive to live and stay in rural areas, which are often struggling with depopulation. It’s a targeted approach to revitalize these communities and address the challenges they face.
Income Tax Exemption for Poor Families with Four or More Children: Another key aspect of the tax reforms focuses on families. Families with four or more children will have their income taxes waived on the first €20,000 of their annual earnings. This is a direct move aimed at boosting the nation’s declining birth rate. The intention is clear: to ease the financial burden on large families and encourage more births, effectively supporting those who choose to have multiple children, even if some find the logic to be questionable.
Furthermore, the government is also cutting income tax rates for those earning between €40,000 and €60,000. Young workers under 25 with incomes up to €20,000 will also benefit from a complete tax exemption. Additionally, there’s a reduction in the tax rate for rental income. These measures are all designed to provide financial relief to a broad spectrum of the population.
These tax cuts are being introduced, according to the Prime Minister, as a way to directly return the fruits of the nation’s economic growth to its citizens, emphasizing that tax cuts are a better way to support the people than simple government benefits. He acknowledges that the rising cost of living is a major concern and that these tax cuts are intended to address that challenge head-on.
This is a significant shift in Greece’s economic policy. The government is aiming to provide relief to those struggling with the high cost of living while trying to encourage population growth in rural areas. This is a complex balancing act, and it’s worth noting that these measures are possible due to the country’s impressive financial recovery and its success in exceeding budget targets.
The fact that these tax changes are compliant with European Union obligations is also important, demonstrating that Greece’s fiscal management is now under control and in line with the regulations. The emphasis is clearly on supporting the middle class and making it more sustainable to live and raise a family in Greece.