Auctions: How and When They Take Place

Dozens of property, land plot and agricultural land auctions are listed on the e-auction platform every day.

The Independent Authority for Public Revenue (IAPR) is proceeding in March with a new round of auctions, intensifying pressure on those who have outstanding debts with the tax authorities, as well as on major debtors who have turned their backs on settlement arrangements.

According to the latest data from the IAPR, overdue debts to the State exceed €112.5 billion, while more than 2.3 million taxpayers are exposed to bank account seizures and confiscations of assets.

The IAPR is accelerating efforts to collect overdue debts, setting a target of more than €6 billion by the end of the year.

Auctions

For high-value debts, the tax authority proceeds with asset freezes, seizures, and property auctions of the debtor, from which, under certain conditions, only the primary residence is exempt.

According to the IAPR, before a property auction takes place, a seizure is imposed. However, prior to any enforcement action, the tax administration is required to serve the debtor with an individual notice of payment/default.

By contrast, no prior notification is required for the seizure of monetary funds.

In exceptional cases where the collection of the debt is at risk, the Tax Administration may bypass the above preliminary procedure and freeze properties before notifying the debtor.

As regards the consequences of property seizure, the following apply:

• From the day the debtor is served with a copy of the seizure report, they lose the right to freely dispose of the property and its components, even if these are not described in the seizure report or even if the debtor was present at the time of the seizure.

• The seizure report does not automatically mean that an auction will take place.

• If the debtor has not included their debts in a settlement program, the Head of the competent Service responsible for debt collection is obliged, after 40 days and no later than four months from the seizure, to set an auction date, which must take place no later than five months from the issuance of the auction program.

• If the auction is not conducted on the scheduled date, a new auction program must be issued within one year from the date the auction did not take place or was suspended, setting a new date as described above. These deadlines may be disregarded if there is a serious reason, which must be stated in a reasoned report by the Head of the Service.

• The issuance of an auction program after the expiry of the legal deadlines does not render it invalid.

• Suspension of the execution of the issued auction program may be achieved either by the debtor joining a debt settlement program or by a court decision granting suspension.