Greek court restricts auctions of primary homes over public debts

The ruling by the Council of State’s Sixth Chamber concerns debt enforcement proceedings involving outstanding liabilities to the state, tax authorities, local authorities, social security funds and other public-law entities, collected under the Public Revenue Collection Code (KEDE).

According to the court’s judgment, a family home cannot be seized and scheduled for auction if the debtor possesses other assets from which the state’s claim can be satisfied.

The ruling also broadens access to judicial protection for debtors, recognising their right to lodge an objection at different stages of the enforcement process. Specifically, an objection may be filed either upon notification of the seizure report or at a later stage, up to the issuance of the auction notice.

Previously, objections had been considered admissible only at the initial stage, following notification of the seizure report.

The case before the Council of State

The case concerned a 162-square-metre property in Moschato, Athens, comprising a maisonette occupying the first and second floors of a building. The property was jointly owned by the chief executive of an industrial company and his wife, each holding a 50% share.

The head of the Piraeus Tax Office had included the property in a compulsory auction programme over the company’s overdue debts to the state.

The chief executive challenged the auction before the Athens Administrative Court of First Instance, seeking its annulment. The court upheld his objection, finding that the proceedings violated the principles of good administration and proportionality.

The state subsequently appealed, but its appeal was dismissed by the Athens Administrative Court of Appeal.

The appellate court took into account that the property ‘was the only primary residence in which he lived with his family, and that he owned other real estate in various parts of Greece apart from the property scheduled for auction’.

It ruled that the decision to auction the property ‘was contrary to the principles of good administration and proportionality, since it did not constitute an appropriate and necessary measure for the collection of debts owed to the state, given that the state’s claim could be satisfied through less burdensome measures’.

The state argued that the head of the Tax Office had lawfully exercised the discretion granted under the Public Revenue Collection Code to select enforcement measures, choosing the property in question rather than another of the debtor’s assets.

The Council of State’s reasoning

The Council of State, sitting under Vice-President Ioannis Gravaris, with State Councillor Eleni Papadimitriou as rapporteur, rejected the state’s application as unfounded, upholding the judgments of the lower courts.

In its reasoning, the court emphasised the constitutional protection of the home as an essential element of human dignity, security and the free development of personal and family life.

The judgment states that, under the Constitution, ‘a person’s home, as an essential element of dignity, security and the free development of personal and family life, is a matter of special concern for the state’.

The court also stressed that protection of the home is linked to fundamental human rights guaranteed by the state. Under Article 25(1) of the Constitution, all state authorities are obliged to ensure that these rights are effectively protected.

Particular emphasis was placed on the principle of proportionality, which derives from the rule of law and requires public authorities to choose measures that are both appropriate and necessary to achieve a legitimate public interest objective.

The Council of State held that when the pursuit of a public interest objective involves depriving someone of their home, the authorities must demonstrate that an auction is absolutely necessary in the circumstances of the particular case.

As the judgment states:

‘The principle of proportionality, which derives directly from the rule of law, requires that whenever a measure taken in pursuit of a public interest objective results in a person being deprived of their home, it must be demonstrated, for any act implementing that measure to be lawful, regardless of the state authority issuing it or the stage of the relevant proceedings, that the measure was absolutely necessary in the specific case. In other words, all attempts to achieve the public interest objective through other appropriate but less burdensome measures must first have been exhausted.’

On this basis, the collection of debts owed to the state cannot automatically justify the auction of a family home without first examining whether alternative means of recovering the debt are available.

The ruling therefore underlines the obligation of the relevant authorities to assess the specific circumstances of each case and exhaust appropriate, less burdensome measures before taking action that would result in someone losing their home.

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