This summer, a new mechanism for managing residential real estate is expected to be launchedwhich should give more than a break 20,000 vulnerable debtors and prevent them from losing their homes as a result real estate auctions.
According to the government’s economic plans, Real Estate Purchase and Leaseback Fund will become the only effective protection mechanism for the first apartmenteffectively replacing the previous protection system based on Katseli’s law. Although this law has been formally repealed, its consequences continue to apply: the latest applications are still being considered by the trial courts and are expected to be completed only within 2026.
More than 20,000 households meet the established criteria for inclusion in the new mechanism.
The fund will have private characterand its management will be taken over by investment structures selected based on the results of a competition announced Ministry of National Economy. The procedure involves Bain Capital Credit, Christofferson, Robb & Co, Fortress Credit And Resolute Cepal Greece SA (formerly Kaican Hellas – Beaumont Summit Financial DAC).
How does the housing protection mechanism work?
For debtors recognized vulnerableThe Foundation acts as last protective barrier. Main residence is bought by the Fund, after which the former owner enters into lease agreement and continues to live in the apartment, paying rent.
At the same time it is stored right of repurchase of real estate in the future if his financial situation improves.
Transition period and government support
Until the Fund is fully launched, it applies Interim support program for vulnerable debtors. It provides immediate suspension of enforcement proceedings in relation to the main apartment and is accompanied state subsidy to repay a loan in the amount of up to 210 euros per month.
This program is temporary nature and is designed to prevent the emergence of a “protection vacuum” before the new mechanism begins to fully operate.
Individuals who meet the criteria may be included in the program “vulnerable debtor”. Currently they assume annual income up to 7,000 euros for one person or up to 21,000 euros for a family with children. Property value should not exceed 120,000 euroswith possible allowances depending on family composition.
Additionally, limit values have been set for bank deposits and movable propertyin accordance with the rules applicable to obtain housing benefit.
It is estimated that more 20,000 households comply with these conditions. However, in practice only small part of them have already undergone the necessary procedures. Most are either unaware of the possibility of protection or delay action until the auction begins, which often leads to irreversible consequences.
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