Who will benefit from the housing measures announced by Prime Minister Kyriakos Mitsotakis during the state budget debate and who could be caught off guard? Will generous renovation subsidies and tax breaks succeed in unlocking Greece’s vast stock of closed homes, or will new rules and restrictions create fresh risks for owners and renters alike? And can these interventions meaningfully cool a housing market under sustained pressure?

These questions sit at the heart of the government’s latest proclamations, which include large-scale renovation grants, targeted tax incentives, rent refunds for specific categories of tenants and tighter controls on short-term rentals. Together, they are intended to push more homes into long-term use and slow rising rental prices. But as reactions from the market and property owners suggest, the impact of the plan will depend not only on its ambitions, but on how its details play out in practice. To Vima is doing a deep dive in the topic, trying to provide context and answers to some of the most pressing questions.

A major renovation program for closed homes

At the core of the government’s package is a large-scale home renovation program that will subsidize up to 90% of renovation costs for older, vacant properties. The program is backed by €400 million in state funding, with grants of up to €36,000 per property.

Eligibility is capped at a household income of €35,000 for couples, with an additional €5,000 allowance for each child. Market participants say the maximum subsidy can cover most, if not all, of the cost of renovating a home of up to about 1,075 square feet (100 square meters), substantially increasing its market value and long-term rental potential.

The measure is designed primarily to encourage owners of closed or unused homes to bring them back into use, either by selling them or offering them for long-term rent. The Hellenic Property Federation (POMIDA) welcomed the initiative as a “very positive” step, citing the pressing need to upgrade aging housing stock in central urban areas.

At the same time, the federation cautioned that the program’s effectiveness will depend on key implementation details, including a clearly defined and limited vacancy requirement, reduced bureaucracy, faster disbursement of funds and transparent subsidy rates for different categories of applicants.

Previous renovation schemes, POMIDA noted, failed to attract broad participation due to long delays in payments and complex administrative procedures that often-led owners to abandon their applications.

Tax incentives for landlords

Additional incentives are being introduced for property owners who rent out their homes. Rental income earned in 2026 and declared in 2027 will be taxed at a lower rate for landlords earning more than €12,000 annually from rents.

Specifically, income between €12,001 and €24,000 will be taxed at 25%, down from the current 35%. Finance Minister Kyriakos Pierrakakis told Parliament that the measure affects more than 160,000 property owners and is intended to bring closed homes back into the long-term rental market.

Rent refunds and mandatory bank payments

For tenants, the government is rolling out a rent refund scheme alongside stricter payment rules. A last-minute amendment delayed the mandatory requirement for residential rents to be paid through bank accounts by three months.

The new start date is April 1, 2026, instead of Jan. 1, to allow time for the development of a comprehensive data cross-checking system alongside payment service providers and to give citizens time to adapt to the forthcoming ministerial decision detailing exemptions and technical requirements.

Once the requirement comes into force, failure to comply carries penalties. Landlords risk losing a 5% tax-free allowance on rental income, while tenants will no longer be eligible for any housing benefits.

The prime minister also announced that 50,000 teachers, nurses and doctors working outside the major urban centers of Athens and Thessaloniki will receive the equivalent of two months’ rent back each year, regardless of income. From April 1, 2026 onward, rent payments for these groups must also be made exclusively through the banking system.

New limits on short-term rentals

One of the measures that has drawn the strongest backlash from property owners is the introduction of new restrictions on short-term rentals, with existing rules now extended to the center of Thessaloniki.

Under the new framework, any property listed for short-term rental in Athens and Thessaloniki will be automatically removed from the Short-Term Rental Property Registry when it is sold, and possibly when it is transferred through a parental gift or inheritance.

POMIDA argues that short-term rentals are not the root cause of Greece’s housing shortage and that additional restrictions will not resolve the problem, particularly in the centers of Athens and other major cities. According to the federation, many of the spaces currently used for short-term stays were never intended for residential use but were originally industrial or office properties that have long since lost value, especially after such uses were banned in urban cores.

POMIDA also warned that the provision mandating the automatic removal of a property from the short-term rental registry upon transfer -either by sale or through parental gifts or inheritance- would be damaging to property ownership. The federation said the measure undermines the core of property rights by sharply reducing a property’s value solely because it changes hands.

Incentives for private affordable housing investments

The government also outlined a new framework for private investment in affordable housing. Construction companies would be allowed to build new apartments or convert existing buildings into residential units if they commit yo using them exclusively for rental for at least 10 years.

In return, under the new proposal, rental income would be deductible from income tax, while maximum rent levels will be set centrally by the state. Market participants described the idea as very promising but cautioned that its success will depend on how it is legislated. They emphasized that meaningful private-sector participation would require full tax exemptions on rental income, along with clear and binding rent-setting rules that safeguard investors against future policy changes.

Faster conversions and smaller apartments

Finally, the Environment Ministry plans to introduce zoning rules to speed up the conversion of abandoned or unfinished buildings into residential use. These projects would qualify as private investments with tax incentives.

Market experts also highlighted the need for an additional reform: allowing large apartments in apartment buildings to be legally divided into smaller units, even where current building regulations prohibit it, to increase the supply of smaller, more affordable homes.