Up to 73% Reduction in Living Expense Imputed Income for Homes, Cars, and Boats from 2026

Significant reductions in living expense imputed income (“tekmiria”) are introduced by the new bill of the Ministry of Economy and Finance, which has been submitted for public consultation.

The changes will apply retroactively to income earned in 2025 and declared in 2026, lowering imputed income values by up to 73% for cars, 30% for residences, and up to 30% for leisure boats.

Key Tax Relief Measures

• Dependent children with their own income will now be fully exempt from the minimum imputed income of €3,000.
• The measure is expected to be voted on before the new state budget, offering substantial tax relief to around 480,000 taxpayers.
• Last year, imputed income brought €4.2 billion in revenue to the state, but often led to inequities, especially in cases involving inheritances or low-income households.

Reductions for Real Estate

The imputed income values (“tekmiria”) for primary residences are gradually reduced depending on the size of the property, according to the new draft bill. The new rates per square meter are as follows:

 Overall, the imputed income values for primary residences are reduced by around 30% across all categories, providing substantial tax relief for households.

Adjustments for High-Value Areas

The surcharge for expensive property zones is reduced to:

• 30% (from 40%) for zone prices between €2,800 and €4,999, and
• 58% (from 70%) for zones above €5,000.

For example:

An 80 m² residence in a €1,750 zone will now have an imputed value of €2,240 instead of €3,200, representing a 30% reduction.

For detached houses, a 20% surcharge still applies, while secondary residences enjoy a 50% reduction.

Reductions for Vehicles

For cars up to 15 years old, imputed income will now be calculated based on CO₂ emissions, following the same method as road tax.

Reductions reach up to 73% for new or hybrid vehicles, while older cars (over 15 years) remain unchanged.

Examples:

• Toyota Corolla Hybrid: from €7,600 → €2,000 (-73.7%)
• Fiat 500: from €4,000 → €2,000 (-50%)
• BMW 116i: from €5,800 → €2,210 (-61.9%)
• Audi A4: from €8,800 → €2,450 (-72.2%)

Reductions for Boats

Imputed income for leisure boats will be reduced by 30%, regardless of age.

For instance, a 5-meter speedboat will see its imputed value drop from €4,000 to €2,800.

For sailing yachts and traditional wooden vessels, the reduction reaches 50%.

The reform aims to establish a fairer taxation system, improve tax compliance, and ease the financial burden on middle-class households that previously paid higher taxes due to outdated imputed expense calculations.