NOK: Under the Microscope of the Council of State, the Plan for Reviving Building Permits

In a race with no guaranteed finish line, property owners and investors are trying to ‘unblock’ projects that have been frozen due to recent annulment decisions by the Council of State (CoS). The new Presidential Decree drafted by the Ministry of Environment and Energy aims to provide a solution but comes with significant economic costs, heavy bureaucratic burdens, and considerable uncertainties. At the heart of the plan is the so-called environmental equivalent, a special fee that those wishing to continue constructing buildings previously canceled or legally challenged must pay. The revenue will be allocated by municipalities for ‘green’ urban interventions. However, as market stakeholders point out, the cost is prohibitive, and the process—requiring opinions from KESYPOTH and KESA—is extremely slow and complex. According to market factors, these amounts can exceed €40,000 or even €60,000 per case, depending on the objective value and use of spaces (e.g., basements, floors, etc.). For example, for a 35 sqm floor and a 100 sqm basement in an area with a zone price of €2,000, the total burden reaches up to €40,500—a prepayment without success guarantee. The Presidential Decree, awaiting approval by the CoS, outlines three main cases that can verify the commencement of works: excavations or demolition, collapses in the same plot until December 11, 2024, and archaeological works. This regulation covers only a limited number of projects, leaving thousands of cases outside, especially those that haven’t started any work or are in off-plan areas. The uncertainty has impacted data significantly; according to ELSTAT, building permits issued in February 2025 decreased by 22.1% compared to February 2024, with a 35% drop in surface area and 25.8% in volume during the first two months of the year. Many owners and investors have resorted to appeals at the European Court, arguing for the violation of the rule of law principle, claiming unequal treatment despite obtaining permits under the same legal framework.