In a landmark ruling marking a first in its 97-year history, Greece’s Council of State has effectively blocked the seizure and auction of a primary residence serving as a family home over debts to the state, the tax authorities and other public bodies, provided the debtor owns other assets that can be seized.

According to the Council of State judges, a debtor’s family home cannot be seized and included in an auction schedule if the debtor has other assets that could be used to cover the outstanding debt.

The ruling applies to all cases involving debts owed by citizens to the state, tax offices, local authorities at both levels — including municipalities and communities — social security funds, public-law legal entities and other public bodies. In other words, it covers all debts collected under the provisions of the Public Revenue Collection Code.

Another important step taken by the Council of State judges is to allow debtors to file an objection at any stage of the auction process. This means an objection can be lodged from the initial stage, when the property seizure report is served, right through to the final stage, when the auction schedule is issued. Until now, it had been accepted that an objection could be filed only at the initial stage, when the seizure report was drawn up.

The head of the Piraeus Tax Office for Public Limited Companies (FAE) had included a property in Moschato in a compulsory auction schedule. The property was a 162-square-meter maisonette spanning the first and second floors, half-owned by the CEO of an industrial company limited by shares. The action was taken over the company’s overdue debts to the state, amounting to €142,917.

The maisonette was owned 50% by the CEO and 50% by his wife. The value of his half of the property was estimated at €100,000, and the starting bid was set at €80,000.

The CEO filed an objection to the auction schedule before the Athens Administrative Court of First Instance. He argued that including the 50% share of the home where his family lived in an auction violated constitutional provisions establishing “the obligation of state bodies and bodies of public-law legal entities to effectively protect marriage and the family, and to ensure the protection of the family home.”

He also argued that the constitutional principle of proportionality had been violated, since the property being auctioned was the only home occupied by him and his family. The Greek state, he maintained, could have taken less onerous measures to recover the debt, such as first pursuing the other real estate assets he owned.

The court of first instance upheld the objection and annulled the compulsory auction schedule, ruling that its issuance was contrary to the principles of sound administration and proportionality.

The state immediately appealed, but the Athens Administrative Court of Appeal dismissed the appeal as unfounded. The administrative appeal judges found that the property in question “constituted the only primary residence in which he lived with his family, and that he owned real estate in various parts of Greece in addition to the property being auctioned.”

The court therefore ruled that issuing the auction schedule “was contrary to the principles of sound administration and proportionality, since it was neither a suitable nor a necessary measure for collecting the debts owed to the state, given that the state’s claim could have been satisfied through less onerous measures.”

Nevertheless, the state took the matter a step further and appealed to the Council of State, seeking to have the appellate ruling overturned on the grounds that the Constitution, the Public Revenue Collection Code and the Code of Administrative Procedure had been incorrectly interpreted.

The state also argued that, by deciding “to seize this particular property rather than any other assets the debtor might own, the head of the tax office exercised the discretionary authority granted under the Public Revenue Collection Code to select specific enforcement measures.”

The Council of State’s Sixth Chamber, presided over by Vice President Ioannis Gravaris, with Council of State judge Eleni Papadimitriou serving as rapporteur, rejected the state’s application as unfounded. The judges emphasized that, under the Constitution, “a person’s home, as an essential element of dignity, security and the free development of their personal and family life, is an object of special state protection.”

State protection of the primary residence, they added, “falls within the protection of fundamental human rights guaranteed by the state, and all state bodies are obliged to ensure that this protection is effective, as expressly stipulated in Article 25, paragraph 1 of the Constitution.”

In this context, the Council of State judges stressed that, under the Constitution and “the principle of proportionality, which derives directly from the rule of law, whenever the pursuit of a public-interest objective involves a measure that results in depriving a person of their home, it must be demonstrated, for any act implementing that measure to be valid, regardless of which state body issues it or at what stage of the relevant proceedings, that the measure was absolutely necessary in the specific circumstances. In other words, every effort must first have been exhausted to achieve the public objective through other suitable but less restrictive measures.”

Finally, the court ruling emphasizes that, under the provisions of the Public Revenue Collection Code, “the seizure of a debtor’s property that is demonstrably their sole residence, for themselves and their family, is lawful only if the existence of other assets suitable for satisfying the specific claim has first been investigated and definitively ruled out on substantiated grounds. Otherwise, choosing the residential property for seizure is unlawful.”

The court further clarified that the illegality does not affect only the initial seizure report, but also the subsequent actions taken in the auction proceedings.