Thousands of properties seized over tax debts are set to re-enter the market, as a new decision by Greece’s Independent Authority for Public Revenue (AADE) is expected to be issued within the coming days. The new regulation will allow debtors to proceed with the sale of their seized property and settle their outstanding debts to the state directly from the transaction proceeds.
The aim is to remove the obstacles that have, until now, blocked property transfers — even in cases where an interested buyer existed and the sale could have resulted in partial debt recovery for the state.
Under the new procedure, a portion of the sale price will be mandatorily directed to the state to cover the outstanding debt. This amount cannot be less than 25% of the total debt. In this way, the state immediately recovers part of what it is owed, while the property owner is able to complete the sale and arrange repayment of the remaining balance.
Currently, a tax seizure frequently prevents a property transaction from being completed, even when a willing buyer is available and the sale would generate revenue for the state. Under the new framework, transfers will be able to proceed normally, with the state collecting its share of the debt directly at the point of sale.
At the same time, the property market is expected to receive a significant boost, as thousands of properties that have been locked out of circulation due to seizures will be able to return to the market. At a time of intense housing pressure and limited supply, the new measure is expected to help increase the availability of properties and accelerate the pace of transfers.
Terms of the regulation for seized properties
The new regulation, activated upon the issuance of the AADE decision, provides for the following:
1. The Tax Administration, following an application by the debtor, may issue a decision to lift a seizure imposed on a property for certified tax debts, in view of its transfer for consideration, provided the following conditions are cumulatively met:
– At the time of release, the conditions for issuing a tax clearance certificate or debt confirmation statement are fulfilled.
– The transfer price cannot be lower than the commercial value of the property as determined at the time of seizure.
– Where the commercial value of the property is lower than its objective (assessed) value, the objective value shall apply.
– If the seizure was imposed more than five years prior to the submission of the application, the debtor must provide a valuation report of the commercial value of the property being transferred, prepared by an independent certified appraiser.
– From the transfer price, an amount corresponding to a percentage of the total current outstanding balance of the imposed seizure shall be withheld and remitted to the Tax Administration by the notary. The withholding percentage is determined based on the debtor’s tax compliance record and the collectability of the remaining debt, and in any case may not be less than 25%.
– If the amount resulting from the withholding is greater, the higher amount shall be withheld and remitted in order for the seizure to be lifted.
– In the event that the withholding amount exceeds the transfer price, the entire transfer price shall be withheld and remitted, and the seizure on the transferred property shall be lifted.
2. If the certified overdue debts are fully covered by guarantees or in rem securities, the 25% withholding condition does not apply.
When the above conditions are met, AADE will immediately issue the seizure lifting decision. The Administrator shall determine the procedure, the form of the decision, its duration of validity, and any other necessary details, including the criteria for tax compliance and collectability of the remaining debt.
