The Council of State has put a stop to auctions of primary residences serving as family homes over debts to the state, the tax authorities and other public bodies, provided the debtor owns other assets.
Under a ruling by the Council of State’s Sixth Chamber, a debtor’s family home cannot be seized and included in an auction schedule if the debtor has other assets sufficient to cover the amount owed.
The ruling applies to all cases involving debts owed by individuals to the state, tax offices, local authorities, social security funds, legal entities governed by public law and other bodies. In other words, it covers debts collected under the Code for the Collection of Public Revenue (KEDE).
The court also ruled that debtors may now file an objection at any stage of the auction proceedings. This means they can do so from the initial service of the property’s “report of seizure” 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 issued.
In this case, the head of the Piraeus Tax Office for Public Limited Companies placed a 162-square-metre maisonette, occupying the first and second floors, in Moschato on the schedule for a compulsory auction. The property was half-owned by the managing director of a public limited industrial company, and the action was taken over the company’s overdue debts to the state. The other half of the maisonette belonged to his wife.
The managing director filed an objection to the auction schedule with the Athens Administrative Court of First Instance. The court upheld it and cancelled the compulsory auction schedule, ruling that its issuance was contrary to the principles of good administration and proportionality.
The state then appealed, but the Athens Administrative Court of Appeal dismissed the appeal as unfounded. It ruled that the property “was the only primary residence in which he lived with his family, and that he owned real estate, apart from the property being auctioned, in various parts of Greece”. It also found that issuing the auction schedule “was contrary to the principles of good administration and proportionality, since it was not a suitable and necessary measure for pursuing the collection of the debts owed to the state, given that the state’s claim could have been satisfied through less onerous measures”.
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 discretion provided for under KEDE in choosing specific enforcement measures”.
The Council of State, presided over by Vice-President Ioannis Gravaris, with Council of State judge Eleni Papadimitriou as rapporteur, dismissed the state’s application as unfounded. It stressed that, under the Constitution, “people’s homes, as an essential element of their dignity, security and the free development of their personal and family life, are a matter of particular state concern”. State protection of the primary residence, it said, “is rooted in the protection of fundamental human rights guaranteed by the state, and all state bodies are obliged to ensure that this protection is effective, as Article 25(1) of the Constitution expressly provides”.
The Council of State also said 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 deprives a person of their home, it must be shown, for any act intended to implement that measure to be valid—regardless of which state body issues it and at every stage of the relevant proceedings—that the measure was absolutely necessary in the specific case. In other words, every effort must first have been exhausted to achieve the public objective through other suitable but less onerous measures”.
SOURCE: ANA