Greece's Council of State has ruled that the state may not seize and auction a debtor's family home for unpaid public debts unless it first investigates and rules out other assets that could settle the claim.
The decision covers all debts collected under the Code for the Collection of Public Revenue: tax debts, social security contributions and debts owed to municipalities and other public bodies. It does not apply to private bank loans.
Presiding Vice President Ioannis Gravaris and rapporteur Eleni Papadimitriou rejected an appeal by the state against a lower court ruling that an auction violated principles of good administration and proportionality.
The court said a home is "essential for dignity, security and the free development of personal and family life" and is a matter of special state care under the constitution.
Under the principle of proportionality, it said, authorities must show at every stage that depriving someone of their home was absolutely necessary and that milder measures were exhausted first. Seizing a sole residence is lawful only after other suitable assets have been investigated and excluded on documented grounds.
Otherwise, it said, choosing the home is unlawful, and the illegality taints not only the seizure report but every later step of the auction.
The ruling also says debtors may file an objection at any stage, from notice of the seizure through publication of the auction schedule.
The decision is a setback for the tax authority at a time when the government is promoting relief for borrowers.
Prime Minister Kyriakos Mitsotakis' government has extended payment plans to 120 installments, capped debt servicers' upfront fees at 15% and added protection for primary residences in out-of-court settlements.
Critics note the court did not ban seizures outright, and a home can still be taken if no other assets exist.