Greece Cuts Property Tax to Help Households Hit By Surging Inflation

Greece will cut property tax rates by a further 13% to help households struggling with rising inflation and higher energy costs, Prime Minister Kyriakos Mitsotakis said. The measure follows a 2% increase in the minimum wage announced last month to help low-income earners tackle higher prices in energy bills and consumers goods.

"I can feel that the average income is under siege from the international energy crisis and the price increases, like everywhere in Europe," Mitsotakis said in a special televised message.

The cost for the budget from the tax reduction will be 350 million euros ($396 million) annually, he added.

The surging cost of energy was the main driver of inflation that accelerated to 5.1% in December, the highest in Greece in 11 years. Since September, the government has spent about 1.75 billion euros ($1.98 billion) in subsidies to help households and businesses with rising electricity and gas bills.

The centre-right government, which came to power in 2019 promising to reduce taxation and boost employment, had already cut property taxes by about 20% and social security contributions by 3 percentage points. 

The property tax was introduced as a one-off measure in 2011 to help Greece raise revenues as it grappled with a deep recession due to a decade-long debt crisis. "From now on, eight out of ten citizens will pay lower property tax," Mitsotakis added. ($1 = 0.8844 euros)