The Greek 7% flat tax regime.

Of all the questions we get from people considering a serious move to Greece — not just buying a property but actually relocating tax residence — the most-asked is some variant of "how does the 7% deal work, and is it real?" The short answer: it's real, it's been in force since 2020, and as of 2026 the regime continues to attract growing numbers of foreign pensioners and returning diaspora retirees. But the headlines oversimplify it. There are eligibility requirements, application mechanics, and operational realities that determine whether the regime is the right move for you.

This article is the 2026 practical guide. It covers both the pensioner regime (Article 5B at 7%) and its less-discussed sibling (Article 5A, the €100,000 non-dom regime for high-net-worth movers), how to compare with Portugal/Italy/Cyprus alternatives, and the operational side of actually being a tax resident in Greece.

Article 5B — the 7% pensioner regime (the headline one)

Introduced by Greek Law 4714/2020, Article 5B of the Greek Income Tax Code (ν. 4172/2013) allows a foreign pensioner who becomes a Greek tax resident to elect a flat 7% tax on their foreign-source income — including pension, dividends, interest, rental income from properties abroad, royalties, and capital gains. The election locks in for 15 years.

To qualify, the individual must:

• Not have been Greek tax-resident in 5 of the previous 6 years before applying
• Be tax-resident in a country with which Greece has a tax cooperation agreement (most OECD countries, including Australia, USA, Canada, UK, Germany, France, etc.)
• Receive a pension from abroad
• Become Greek tax-resident going forward — which under Greek law generally means spending more than 183 days per calendar year in Greece, or having one's "centre of vital interests" in Greece

Important nuance: the pension can be from any source — government pension, occupational pension, private pension, military pension. The bar for "receives a pension" is interpreted reasonably; you don't need it to be your only or even primary income, but it must be a genuine ongoing pension.

Election is made by application to AADE (the Greek tax authority) by 31 March of the tax year in which you wish the regime to begin. Decisions are typically issued within 60 days. Once approved, the regime runs for up to 15 consecutive years, terminating automatically at year 15 or if you exit Greek tax residence.

What "foreign-source income" actually means under 5B

The 7% flat rate applies to all income with a foreign source, defined under standard international tax principles:

• Pensions paid by foreign payers — government, occupational, private — regardless of currency
• Dividends from foreign companies — public or private
• Interest from foreign banks and bonds
• Rental income from foreign property — note: not Greek property; Greek rental income is taxed under standard Greek rules even under 5B
• Capital gains on foreign securities
• Royalties from foreign sources
• Income from a foreign-source business or self-employment (subject to specific rules)

Greek-source income (Greek rental property, Greek dividends, Greek-source employment income, Greek capital gains) continues to be taxed under standard Greek income tax rules at progressive rates up to 44%. This is critical to understand — the 7% regime is for your foreign income, not for everything you earn while in Greece.

The math — when 7% is actually worth it

The election is worth it when 7% of your foreign-source income is materially less than what you would pay either in (a) standard Greek tax rates on the same income, or (b) your previous country's tax on that income (factoring in tax treaty positions).

Standard Greek progressive income tax rates (2026) for individuals not under 5B:

• First €10,000: 9%
• €10,001–€20,000: 22%
• €20,001–€30,000: 28%
• €30,001–€40,000: 36%
• Above €40,000: 44%

Plus a solidarity contribution on higher incomes (currently suspended through 2026). Net of all: someone with €80,000 of foreign-source income pays around €25,500–€28,000 in standard Greek tax (~32–35%), versus €5,600 under the 7% regime. Annual saving: roughly €20,000+. Over 15 years: €300,000+.

For lower foreign incomes (say €25,000 pension), the math is less compelling — standard Greek tax would be around €4,500, vs €1,750 at 7%. Annual saving of €2,750 — meaningful but not transformative.

The break-even point where 7% becomes definitively attractive vs standard Greek tax is around €30,000–€40,000 of annual foreign-source income.

The minimum-tax floor and other catches

A few details that aren't in the headline:

• Minimum tax payable. The regime requires paying 7% of foreign income, with no minimum floor in absolute terms — i.e., low-income pensioners genuinely pay only 7%. There's no €10,000-style threshold like under Article 5A.
• No deductions on foreign income under 5B. The 7% is on gross foreign income. You can't deduct foreign mortgage interest, foreign expenses, etc. This is unlike standard Greek taxation, which allows certain deductions.
• Solidarity contribution. Currently suspended, but historically applied above 7%. If reinstated, it could affect 5B beneficiaries — though to date the political appetite to claw back any of this regime has been low.
• Continued home-country obligations. Becoming Greek tax-resident under 5B doesn't automatically discharge tax obligations in your former country of residence — most jurisdictions require formal exit-tax filings, change-of-residence declarations, and continued reporting on departing-country source income.
• Application deadline. You must apply by 31 March of the tax year in which you want the regime to start. Miss the deadline and you wait a year.

Article 5A — the €100,000 non-dom regime (the high-net-worth one)

Separate from 5B, Article 5A of the same code provides a flat-fee tax regime for high-net-worth individuals (not pensioners specifically) who:

• Were not Greek tax-resident in 7 of the previous 8 years
• Make a qualifying investment in Greece of at least €500,000 (real estate, business, government bonds, or specific other categories)
• Become Greek tax-resident going forward

Under 5A, foreign-source income is taxed at a flat €100,000 per year (not 7%). For each family member also moving (spouse, children), an additional €20,000 per person can be paid for them to be covered under the same regime.

5A makes sense at much higher income levels than 5B. The break-even where €100,000 flat is better than 7% is roughly €1.43 million of foreign-source income. Below that, 5B (if eligible) is more attractive; above it, 5A wins. For very-high-earning entrepreneurs, family-office principals, and large-portfolio retirees, 5A has been the genuine attraction.

The €500,000 minimum investment is typically directed to Greek real estate (which conveniently aligns with the Golden Visa minimum). One €500,000 Athens Riviera apartment can qualify both the Golden Visa and 5A, though they are separate regimes with separate paperwork.

How Greece compares to the alternatives

Portugal NHR / IFICI+

Portugal's "Non-Habitual Resident" regime — a major draw for retirees through 2024 — was replaced from 2024 by the more restrictive "IFICI+" regime. The new regime is narrower in scope (focused on scientific/technical professionals rather than retirees broadly), and Portugal's general appeal as a low-tax retirement destination has softened materially since 2023. Portuguese pension income is now taxed at 10% under transitional rules but the regime as a whole no longer competes head-on with Greece's 5B for retired foreigners.

Italy €100,000 / €200,000 regime

Italy has a similar high-net-worth non-dom regime to Greece's 5A — flat €100,000 (€200,000 after recent reforms in some applications) per year on foreign income. The Italian version is older and more battle-tested. For very-high-net-worth families specifically, Italy's regime is competitive with Greece's, but Greece's 5B at 7% has no Italian counterpart — Italian pensioners pay at progressive Italian rates.

Cyprus

Cyprus offers a generous 50% deduction for new tax residents on employment income, plus a non-dom regime that exempts dividends and interest from local tax. For an employed mover, Cyprus is often more attractive than Greece. For a retired pensioner, Greece's 5B at 7% typically wins because Cyprus levies up to 35% on pension income above modest thresholds.

Malta, Monaco, UAE, Andorra

Other low-tax destinations exist but each has its own restrictions — Maltese tax residency requires specific qualifying conditions; Monaco requires a substantial bank deposit and apartment; UAE is no-tax but requires significant economic substance under recent rules; Andorra is small-scale and has limited treaty network.

For the diaspora retiree audience specifically — Greek-Australians, Greek-Americans, Greek-Canadians considering a return to Greece — the 7% regime under 5B is one of the most attractive frameworks in Europe in 2026.

The application process

Practical steps to apply for 5B:

1. Engage a Greek tax accountant who has handled multiple 5B applications. Premium pricing — €1,500–€4,000 for the application itself
2. Gather documentation: proof of non-Greek-residence for 5 of past 6 years (tax returns from your country of residence), proof of pension (pension award letters, payment confirmations), proof of intended Greek residence (rental contract or property ownership)
3. Establish Greek tax residence by physically relocating or otherwise satisfying the residence test
4. Obtain Greek ΑΦΜ if not already held
5. File the 5B application with AADE by 31 March of the target tax year
6. Receive AADE decision within ~60 days
7. From that point, file annual Greek tax returns under the 5B regime — typically by 30 June each year

The operational realities of being Greek tax-resident

Beyond the tax election itself, being Greek tax-resident means:

• You must spend more than 183 days a year in Greece, or otherwise demonstrate Greece is your centre of vital interests. AADE has tightened residency-evidence requirements significantly since 2023.
• You report all global income to Greece on your annual Greek tax return — even though you're taxed at 7% on foreign income, you still declare it.
• You generally cease being tax-resident in your previous country. Australian, US, Canadian, UK exit-tax rules vary and can be material for US citizens specifically (US citizens are taxed on worldwide income regardless of residence, so leaving the US tax net is a more significant step than for Australians).
• You need Greek health insurance. Either through Greek public-system enrollment or private cover. Major source of friction for new movers.
• Greek banking, residence permits (for non-EU citizens), and address registration are all sequential, time-consuming setups.

The 7% tax saving is worth it only if you genuinely want to live in Greece. The regime is not a "paper residence" tool — AADE explicitly looks for genuine residence, and challenges paper-only arrangements.

For returning Greek diaspora specifically

Returning Greek-Australians, Greek-Americans, Greek-Canadians considering a move back to Greece have specific considerations:

• You may already hold Greek citizenship — that doesn't disqualify you from 5B. The regime is about tax residence, not citizenship. Being a Greek citizen who has lived abroad for decades and now returns is exactly the audience the regime was designed for.
• If you held Greek tax residence at any point in the past 6 years, you're disqualified. If you've been gone for 30 years and never had a Greek tax-resident status, you're fine.
• If you're inheriting Greek property and considering relocation, the timing matters. The 5B clock and the inheritance timeline interact in non-obvious ways. Worth structuring with a Greek tax advisor before any major moves.
• Inherited property income (Greek rental) is taxed under standard Greek rules, not under 5B. 5B doesn't help with the Greek income side.

How home watch fits

The 7% tax regime is a tax-advisor question, not a home-watch question. We don't file 5B applications. What we do is help with the operational side that almost everyone underestimates:

• Preparing your Greek property for actual occupation (different from absentee maintenance — different priorities, different setups)
• Setting up Greek utilities, internet, and banking ahead of your arrival
• Helping you find a Greek tax accountant who has done multiple 5B applications
• Local logistics support during the initial relocation months
• If you're splitting your time between Greece and your prior country during the transition, ongoing home watch on the Greek property during your absences

For the Golden Visa cohort considering 5A, the operational layer is similar but at a higher service tier — see our Golden Visa property care page.

Companion reading: what you actually pay buying property in Greece, ENFIA for foreign owners, opening a Greek bank account from abroad.