Greece implements new debt mechanism to protect primary residences

Greece has implemented new updates to its Extrajudicial Debt Settlement Mechanism, effective September 21, 2026, aimed at enhancing the protection of primary residences. A central feature of the reform allows debtors to decouple their primary home from their remaining real estate assets during the debt restructuring process.

Under this new framework, monthly installments and debt reductions will be calculated based solely on the value of the primary residence and the debtor's income, rather than their total property holdings. To facilitate this, debtors may agree to the voluntary liquidation of secondary properties through a simplified auction process to satisfy creditors. This approach can lead to more favorable terms, including lower monthly payments and larger debt write-offs.

Additionally, the reform introduces greater flexibility for those who have previously lost a settlement. While the standard waiting period to reapply was 12 months, the new rules allow for re-submission within six months if the debtor chooses the primary residence protection path via asset liquidation. The total debt limit for inclusion in the mechanism has also been lowered from 10,000 to 5,000 euros, expanding access to more citizens and professionals.