The Council of State’s decision, expected to be finalized and published early next year, has captured the attention of the real estate market and the government, which aims to decipher the details of the recent ruling that declared the incentives under the new building regulation unconstitutional, twelve years after their enactment.

The government’s immediate priority is to assess the scale of the problem, as significant ambiguity exists regarding individual cases that cannot be clarified until the decision and its rationale are officially released. To address this, the Ministry of Environment and Energy will launch a public consultation platform next week, allowing for the documentation of specific cases of building permits affected by the ruling, which will help inform the government’s planned intervention.

Simultaneously, the ministry has announced new provisions for those holding building permits based on the incentives of the New Building Regulation (NBR). According to Environment and Energy Minister Theodoros Skylakakis, a fast-track procedure will allow those who have completed all necessary approval stages for a building permit (based on the 2012 regulation) to transition automatically to the new framework without redoing the entire process, enabling them to build without bonuses.

The initial reading of the Council of State’s decisions has led to conflicting interpretations and ambiguities, not only within the government but also among experts in the scientific and technical fields. The only beneficiaries appear to be buyers and property owners who successfully constructed buildings using the advantageous provisions of the NBR, as permitted by law. The biggest losers are undoubtedly those who failed to initiate construction, despite holding valid permits, as well as those who began building but faced legal challenges from municipalities or citizens, resulting in halted construction.

State Interventions

The government, which closely monitors the evolution of the NBR and intervened earlier this spring to rectify excessive building heights (reducing them by 4-5 meters), has stated through Minister Skylakakis that it will legislate to align with the Council of State’s directives. Initially, the Ministry of Environment plans to incorporate provisions of the NBR (e.g., regarding heights, roof gardens, and planted roofs) into the ongoing nationwide urban planning projects, applying them selectively where needed rather than universally.

As Minister Skylakakis clarified, “We’re not looking to plant roof gardens in Papagou or Filothei, which already have ample greenery, but we can introduce similar provisions in Kypseli, a concrete jungle.” Another argument for this strategy is that local urban planning projects, which undergo scrutiny by the Council of State, will reduce uncertainties compared to a law not yet judicially examined.

The ministry emphasizes that the Council of State’s decision, as outlined in the briefing, does not declare the provisions of the NBR unconstitutional. However, it insists that bonuses can only be utilized if local urban planning precedes them. “We do not agree with planning cities through building regulations. Priority must be given to local urban planning projects, and potentially specialized plans, to define building conditions and determine where favorable conditions can and cannot apply,” states Sophia Avgerinou-Kolonia, president of the Association of Urban Planners (SEPOX) and emeritus professor at NTUA.

The real estate market faces challenges because the Ministry of Environment’s interim urban planning, combined with NBR criteria, will require time (at least three years in the best-case scenario). During this period, the market will struggle to meet demand. Another concern raised by government officials is that the Ministry of Environment is tasked with managing the fallout of a law enacted 12 years ago, now declared unconstitutional, which has deeply influenced the country’s society and economy.

Price Increases

What are the implications of the Council of State’s decision on the real estate market, and how do industry professionals interpret the unconstitutional provisions of the Building Regulation? Former president of the Hellenic Federation of Real Estate Agents, Ioannis Revythis, predicts that developers currently constructing buildings and retaining bonuses will raise prices. This will be especially evident in Athens’ southern suburbs, where mayors of Alimos and Vari-Voula-Vouliagmeni challenged the NBR provisions and brought building permits for additional floors to the Council of State.

Conversely, developers who have purchased plots or agreed to exchanges but have not begun construction (and therefore cannot utilize the bonuses) are certain to lose out. Even if they proceed without NBR incentives, they will need to keep prices high to compensate for the loss of the benefits they would have gained. Regarding land prices, Revythis anticipates a decrease due to reduced building volume.

Revythis also notes the impact of the “My Home 2” program: “In the coming months, 20,000 new buyers will enter the market, looking to purchase homes. This surge in demand will inevitably push prices higher.”

Next Steps

With the market in turmoil, the Ministry of Environment is preparing for the next phase. It plans to open a public consultation for several weeks, inviting affected stakeholders to participate or submit their cases via email. Once the Council of State’s decision is published (early next year), the ministry will decide on its intervention.

Reports suggest the number of affected properties with pending appeals is not large. However, the Council of State’s decision, with its creative ambiguity on who retains the presumption of legality (using December 11th, the date the decision’s outline was announced, as a cutoff), has sparked significant concerns.

“How exactly do we define the start of construction?” asks Dimitris Xynomilakis, president of the Architects’ Association. “I fear we’re heading into a debate about whether digging was deep enough or enough steel was used, leading to a new cycle of legal battles in a market frozen for months.” The Council of State’s ruling invalidates four contested building permits from the Municipality of Alimos. However, it also casts doubt on thousands of legally issued permits: “Building permits that have been approved and for which studies have been paid and submitted to urban planning departments must not, under any circumstances, be halted, regardless of whether construction has begun.”

The Hellenic Society for the Environment and Culture (ELLET) has called on the Ministry of Environment to issue a circular to all urban planning departments to prevent new permits under NBR provisions in areas with special decrees, adhering to the Council of State’s decision. ELLET, which has repeatedly criticized the NBR provisions, expressed relief over the ruling and called for a review of all permits issued in “traditional” city areas. It also criticized the state’s willingness to include NBR bonuses in existing urban plans, arguing that this gives the impression that incentives similar to the NBR might influence scientific criteria in ongoing local and special urban plans, potentially favoring planned developments not yet initiated.

Provisions Annulled by the Council of State

The Council of State’s plenary session invalidated Articles 10, 15 (paragraph 8), 19 (paragraph 2), and 25 of the NBR, which introduced incentives for increasing building coefficients (building volume, height) in exchange for energy upgrades, expanded public spaces, and green areas.

Furthermore, the court ruled unconstitutional the exclusion of certain features (e.g., interior balconies, 35 m² of main-use space on rooftops) from the building coefficient calculation. Even the classification of swimming pools as planted areas was overturned. These features may still be constructed but must now be included in building coefficient calculations. However, the exclusion of bay windows and stairwells from the coefficient was deemed constitutional.

George Stasinos (President of the Technical Chamber of Greece – TEE)

“The new construction market will experience a violent collapse”

“The real issue is what happens with those who have no pending legal cases and have not yet started construction work,” states the president of TEE, George Stasinos, to “THEMA,” answering six questions about the Council of State (CoS) decision.

What are the gray areas in the CoS announcement?

A short announcement of a few words about an issue that concerns the entire market and society, affecting thousands of our fellow citizens… It proves inappropriate to issue announcements on such critical matters without the essential documents, such as the CoS decision with its ruling and reasoning. Unbelievable problems and questions arise, such as cases where, on neighboring plots, one person is allowed to build, and another is not. Or where one person started construction one day earlier, while another, being one day late, missed a deadline that was never clear. Or cases where one is building normally, while another lost out simply because they went to court—not due to the court’s decision itself. We are also bound to face implementation issues.

Who, in the end, can build and who cannot from now on?

What I can tell you with certainty is that many people will find themselves at a loss without having done anything wrong or being at fault. Thousands of engineers and property owners will lose countless hours of work and money trying to adapt to a new situation, one that was fully legal to begin with.

– How does the construction market weigh the new framework?

For the next two years, the new construction market will experience a violent collapse, especially after the completion of the projects that are already underway. Until an institutional solution is provided or the Ministry of Environment and Energy (YPEN) legislates a new building regulation—something complicated, difficult, and time-consuming—the issuance of new permits will significantly halt. Furthermore, during a period of a housing crisis, the CoS decision will lead to an increase in housing prices and, evidently, rents, since no new properties will be built.

How many permits are estimated to have been challenged in court?

We cannot have a clear picture of the appeals or the reasons cited. However, the real issue is what happens with those who have no legal disputes and have not begun construction, even though everything was fully legal until yesterday…

How is the dividing line drawn between before and after December 11, as set by the CoS? Can the State ensure that a building started construction by December 11 and not, for example, on December 15?

This is a major issue and highlights the challenges of making significant changes through short, concise announcements. There are already dozens of questions and uncertainties regarding how it will be implemented, what each word means, etc. A balance will eventually be found, administratively and practically, but until then, citizens, engineers, and services will face a lot of difficulties.

What happens with a building where construction started but a legal appeal was filed against it, and work has since stopped? Will it be completed, or will it remain unfinished?

From what we can gather from the announcement, since we do not have the decision to read, cases already in court will be judged by the courts. If the appeal concerns only the New Building Regulation (NOK), it will obviously be affected.