Greek Government to Launch Economic Package to Address Housing and Tax Issues

The Greek government is set to launch a comprehensive economic package aimed at addressing widespread discontent among citizens depicted in New Democracy’s 28.31% vote share in the Euroelections. This initiative includes a mix of tax reliefs, income boosts, and strategic interventions targeting affordability, taxation, and the housing crisis.

In a departure from emergency benefits, the focus will be on scheduled tax cuts and income support measures set for 2025. The government plans to advance institutional reforms, particularly to tackle the housing shortage, and will review adjustments aimed at rectifying tax burdens on self-employed professionals.

Reassessments of the taxation system for professionals are slated for the fall, following the conclusion of tax declarations. These reviews will be informed by assessments and appeals submitted by professionals, guiding changes anticipated for 2025.

Starting in 2025, self-employed professionals will enjoy full exemption from business tax, pending a vote this year and integration into next year’s budget. This measure promises a tax reduction of 325 euros for professionals taxed based on declared income.

To address the housing crisis, the government aims to reintroduce thousands of dormant properties into the market, aiming to bridge a shortfall exceeding 200,000 homes. This effort targets affordable housing solutions for various age groups and seeks to stabilize rental and home prices through innovative measures, including the “Social Benefit” program.

Decisions are expected imminently on extending the reduced VAT rate of 13% on coffee and taxi fares until year-end, with potential considerations for further extensions.

Looking ahead to 2025, plans include a pension increase and adjustments to the Special Solidarity Contribution scale to ensure equitable treatment. Additionally, a gradual reduction in insurance contributions is scheduled, aiming for a combined rate of 35.16% by 2027, subject to fiscal conditions.

Despite ruling out a VAT reduction on food, new interventions will address market distortions in sectors like banking, fuel trade, wholesale, and supermarkets, guided by findings from a Bank of Greece study on competition issues.

Farmers can expect a new mechanism from 2025 for reimbursing the Special Consumption Tax on agricultural fuel, while a significant overhaul of means testing, effective January 1, 2025, aims to alleviate tax burdens for low-income citizens by reducing median thresholds by 30%.

Source: tovima.com