The government’s primary goal, in conjunction with the Ministry of Environment and Energy led by Minister Stavros Papastavrou, is to reactivate construction activities that have been stalled for the past five months. This initiative will be pursued through a legislative amendment set to be proposed to Parliament on May 12, targeting issues stemming from the Council of State’s recent rulings regarding building code incentives.
Stavros Papastavrou: Minister of Environment and Energy
The core principle of the new policy is to provide legal assurance to citizens who have lawfully acquired building permits, while safeguarding the environment without hindering residential and economic growth. It also seeks to comply with the Council of State’s decisions for robust protection against future legal challenges.
In this aspect, the new leadership at the Ministry of Environment and Energy aims to formulate a solid legislative framework that includes:
a) A protective layer of permits for those who have commenced work by December 11, ensuring their rights based on the NOK incentives.
b) A prompt review of building permits for those who haven’t started by December 11, along with refunds for all taxes, fees, and contributions related to additional square meters allowed by their permits.
c) The introduction of environmental offsets for municipal units or municipalities to mitigate ecological damage caused by NOK bonuses.
d) Permit holders will pay a financial fee for increased square meters due to building code incentives, applicable to both ongoing legal cases and permits subject to financial instruments (e.g., NSRF, Recovery Fund).
e) Strategic investments (ESHASE – ESHADA), such as the Elliniko project, will progress without requiring fee payments.
A significant indication for NOK’s future is the Council of State’s recent decision regarding bonuses. The ruling stated that the increase in height and building coefficients does not constitute “damage” if it adheres to urban planning norms, leaving room for amendments that accommodate additional bonuses to meet urban needs.
The Regulation: The Ministry of Environment and Energy’s new regulation will be presented as an amendment in a Justice Ministry bill, expected to reach Parliament the following week, and will then be enacted via a Presidential Decree for the highest court’s review.
The government aims to finalize and implement this by the end of the month, clearly redefining building conditions for both those eligible under NOK incentives and those who must comply with new guidelines due to the Council of State’s decisions.
Minister Stavros Papastavrou and Deputy Minister Nikos Tagaras are focused on swiftly restoring normalcy in the market, which has been impacted for months by the Council of State’s ruling on NOK, creating considerable uncertainty regarding the future. The new framework will provide comprehensive guidance and resources for property owners to proceed.
The construction freeze is illustrated by recent ELSTAT statistics, reporting a staggering 37% decline in building permits for January, with no immediate reversal expected until the market adapts to the new measures.
Categories: The Ministry of Environment and Energy will work to reactivate construction activity, clarify the privileges of bonuses, determine who will incur costs to build under existing permits, and navigate the legal complexities posed by the Council of State’s rulings.
Those who obtained building permits and initiated construction by December 11, 2024, will be safeguarded under judicial decisions, allowing them to continue using incentives without the risk of cancellation. This group will not require new regulations, as existing provisions cover them. Excavation work is deemed the commencement of construction, with criteria to be expanded by the Ministry.
Conversely, individuals who have not started work by that date will need to amend their permits to remove building elements (e.g., mezzanines, rooftop rooms) ruled unconstitutional by the court. The Council of State identified it unconstitutional to exclude mezzanines and roof structures up to 35 sq.m. from building coefficients, and provisions for swimming pools must also be included as part of the building coefficient. These elements will be eliminated from the NOK in the upcoming regulatory changes to align with the Council of State.
Recognizing the struggles property owners have faced, the Ministry will mandate refunds of taxes, fees, and contributions for square meters to be eliminated from permits in accordance with the court’s rulings. There will also be no additional taxes or fees for permit revisions, which will be expedited over other applications.
Environmental Offset: The regulation also aims to protect those whose construction work was halted due to legal appeals or those nearing completion who risk being left with unfinished structures. While officials believe this group is relatively small, the new regulation will confer protection through an environmental offset.
This applies to individuals who legally constructed under the current regulations. The framework will require the payment of an environmental fee as compensation for additional square meters. Similar measures were established in previous laws governing illegal constructions but were never put into practice.
The environmental offset is intended to mitigate damage caused by NOK bonuses, focusing on urban and residential improvement that the Council of State deems crucial. These provisions will be implemented at both municipal and regional levels, particularly in major urban areas like Attica and Thessaloniki.
For instance, if an added floor obstructs a neighboring building’s sea view, it could be offset by creating a public space or undertaking redevelopment in the vicinity. There will also be a financial aspect, as fees will be levied for the surplus square meters authorized by the Council of State that do not align with local needs. The Green Fund will support financing these initiatives.
A second group of properties needing environmental compensation includes building permits that haven’t commenced but were involved in various financing programs (Recovery Fund, NSRF). These instances encompass properties that had submitted relevant applications based on the previous building code before it was overturned by the Council of State. In such cases, regulations will mitigate potential compensation claims due to transactions based on permits.
The implementation of environmental offset measures will be guided by a specific plan called the Special Plan for Environmental Offset Urban Upgrading (ESPIAP). This plan, initiated wherever NOK provisions apply, will outline the actions required in a given area (such as establishing public green spaces or redevelopment efforts) to enhance the living conditions surrounding the permits.
The ESPIAP will be developed by the Ministry of Environment and Energy with backing from the Green Fund, and completion of this plan will be a prerequisite for permits involved in financing initiatives. It won’t apply to the first category of permits (e.g., those halted due to appeals); for those, commencement of the special plan will suffice to allow progress. Funds generated from this mechanism will finance environmental actions. According to the law, for buildings that have reached the load-bearing structure stage (skeleton), reissuance of the building permits will be prompt, with provisions in place to finalize this within a few days once ESPIAP is initiated. Conversely, for structures not completed to this stage, reassessment of their files will be necessary by the Ministry’s relevant bodies (KESYPOTHA, KESA).
The Incentives: The regulation outlines two other categories where NOK incentives will remain intact: the special spatial planning tools ESHASE (Special Plans for Spatial Development of Strategic Investments) and ESHADA (Special Plans for Spatial Development of Public Properties), as well as Integrated Development Plans and Town Plan Amendments. The Elliniko investment falls under ESHADA, established by a Presidential Decree in 2018, ensuring special provisions are included in the law. The second group retaining NOK bonuses is comprised of listed buildings, as these are not broad regulations but pertain to specific regions, aligning with the Council of State’s principles.
- The building bonus remains applicable for those who commenced work by December 11, 2024.
- However, they will incur financial obligations…
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