Council of State limits seizure of primary residences over debts owed to the State

In Decision No. 1404/2026, the Sixth Chamber of the Supreme Administrative Court held that the seizure of a property demonstrably constituting the family’s sole residence must be treated as a measure of last resort, where no other appropriate means of satisfying the claim through the debtor’s assets are available.

The ruling does not establish a general prohibition on the auctioning of primary residences. Rather, it restricts the State’s ability to target such a property without first conducting a properly documented assessment of alternative enforcement measures.

The Case in Moschato

The dispute concerned the seizure of a 50% ownership interest in a 162-square-metre maisonette in Moschato, owned by the chief executive officer of an unlisted industrial company, in respect of the company’s overdue debts to the State amounting to €142,917. The remaining 50% of the property belonged to his wife, and the residence was used to accommodate their family.

The seized ownership interest had been valued at €100,000, while the reserve price for the auction had been set at €80,000. The debtor challenged the seizure before the courts, arguing that he owned other properties that could be used to recover the outstanding debt without jeopardising the family home.

The Athens Administrative Court of First Instance annulled the auction programme, and its decision was subsequently upheld by the Administrative Court of Appeal. The State then brought an appeal before the Council of State, which dismissed the application for cassation.

Implications for the Tax Authorities

According to the reasoning underpinning the judgment, the existence of overdue debts does not, in itself, constitute sufficient justification for the seizure of a family’s sole residence. The competent authorities are required to examine whether other assets suitable for satisfying the claim are available and to provide adequate reasons for their choice of enforcement measure.

This obligation is linked to the principle of proportionality and the constitutional protection afforded to the home and family life.

The Court further accepted that, subject to the applicable legal requirements, the failure to conduct the required investigation may be raised through an objection to the auction programme, even where no successful challenge to the initial seizure has previously been brought.

If the objection is upheld, the auction programme may be annulled, potentially rendering the preceding seizure ineffective.

Who Is Affected by the Ruling?

The Council of State’s ruling concerns compulsory debt recovery proceedings governed by the Code for the Collection of Public Revenue (KEDE), including claims brought by the State and other entities that rely on this legislative framework. It does not automatically alter the rules governing auctions initiated by banks or debt-servicing companies in connection with private debts.

For debtors, the judgment strengthens the scope for judicially challenging a seizure where it can be demonstrated that the property constitutes the family’s sole residence and that no adequate assessment of other suitable assets has been undertaken.

However, this protection is neither automatic nor equivalent to the discharge of the outstanding debt. The tax administration retains the power to pursue compulsory recovery, provided that it complies with the applicable statutory requirements and the principle of proportionality.