Govt, banks reach agreement on new framework to protect primary residences from creditors

An agreement was announced on Thursday evening between the Greek government and the four systemic banks in the country over a new legal framework to protect primary residences from creditors.

According to initial reports, the criteria for eligibility, on the part of home owners, include an objective value for the property not exceeding 250,000 euros and less than 130,000 euros remaining on the outstanding loan or loans. Objective tax criteria in Greece for property is set by the independent public revenues authority. Income criteria for property owners are: less than 12,500 euros in annual income for a single person; 21,000 for a couple and an additional 5,000 euros for every minor in the family.

A “haircut” of the loan, linked with the property as a guarantee, is possible if the value of the loan exceeds the value of the property by 120 percent.

The new framework will also reportedly include non-performing business loans where a primary residence is the guarantee/collateral.

The current legal framework expires at the end of the month.