Greece Moves to Stabilize Construction Sector After Court Ruling Halts Building Bonuses

17:32 5/5/2025 - Πηγή: Dikaiologitika

Greece’s government is preparing to introduce a critical amendment to Parliament on May 12, in an effort to stabilize its construction sector following a major legal setback.

The move comes after the country’s highest administrative court, the Council of State, ruled unconstitutional key provisions

of the New Building Code (NOK), effectively banning the widely used building “bonuses” that had allowed developers to add square footage—such as attics, mezzanines, and pools—without counting them against legal building limits.

The court's decision created widespread uncertainty in the property market, freezing new projects and leaving thousands of construction permits in limbo. To address the disruption, the Ministry of Environment has drafted legislation that both protects certain ongoing projects and introduces a new mechanism—called the “environmental offset”—designed to compensate for the environmental impact of overbuilt structures, rather than requiring their demolition.

Under the proposed amendment, projects that secured building permits and began physical construction, such as excavation, before December 11, 2024, will be allowed to proceed as planned, fully retaining their bonus features.

However, permits issued before that date where no work has begun must be revised to remove any additional square footage granted under the NOK’s now-invalidated bonuses. In these cases, property owners will be refunded taxes and fees paid on the extra area.

For developments caught in legal disputes or tied to public funding programs—such as those financed by EU structural funds or the Recovery and Resilience Facility—the government will implement the environmental offset. This means rather than dismantling already-constructed bonus areas, developers will pay a fee based on the added square meters. The revenue will be used for environmental restoration and urban renewal projects in the affected areas, such as creating green spaces and public parks.

Strategic developments, including high-profile projects like the Hellinikon regeneration in Athens, will be exempt from the new restrictions. These initiatives, governed by special planning frameworks, are evaluated individually and not subject to the general rule changes.

Although the amendment is expected to pass swiftly, full implementation—including the offset mechanism and permit revisions—will require additional time and regulatory clarity. The government estimates that market conditions could begin to normalize within five to six months.

For now, no new building bonuses will be granted under future permits until detailed urban planning frameworks are updated at the local level. The temporary suspension is expected to reduce housing supply potential by up to 25%, which may further strain an already tight real estate market and exacerbate Greece’s housing affordability crisis.

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