On August 14, the Prime Ministry issued Decree No. 1312, which stipulates that fees for construction permits be paid in three instalments over a period of two years. The first instalment is set at 40 percent of the value of the permit and is paid upon obtaining it. The second is set at 30 percent and paid at the end of the first year of the permit period, while the remaining third is set at 30 percent and is paid at the end of the second year.
Administrative units grant construction permits to land owners in accordance with certain laws and regulations. Any building constructed without a permit is considered unlicensed under Law No. 40 of 2012, which addressed the removal of unlicensed structures. Permits are granted only within zoned areas, although in some cases may be granted within agricultural lands as well.
The implementation of Financial Law of Administrative Units No. 37 of 2021 caused a spike in construction permit fees, leading to stagnation in the real estate sector. Under Law No. 37, the fees are charged directly by administrative units, not the central government, and include a list of sub-fees: SYP 3,000 for registering the permit, a payment of one percent of the current value of the entire surface area of the building, a payment of four percent of the current value of the building’s total balcony square footage, SYP 2,000 for planning expenses, a fee for using sidewalks to stock building materials during the construction period, and finally, a one-time lump sum. The increase in construction permit prices is mainly due to the sub-fee requiring payment of one percent of the property’s current value.
Permit holders have the right to obtain building materials such as cement, iron and others from public sector institutions at official prices during the period laid out in their permits and in proportion to the size of the building they wish to construct.
A permit for a six-storey building is valid for three years, with each additional floor adding six months. However, the period may not exceed five years. In all cases, the administrative unit collects all the fees associated with the permit even if the construction was not completed or only partially completed.
If the permit period ends without the construction of a building, the contractor must obtain a new permit and pay new fees. However, a permit holder may obtain what is called a “permit extension” free of charge, if they submit an application before their original permit expires and provide legitimate reasons for the incomplete construction. Contractors may also obtain a “permit renewal” when part of their building remains incomplete. In the case of “permit renewal”, the administrative unit collects fees based on the part of the building that remains incomplete. Finally, a permit holder may wish to change the specifications of their building, in which case they would obtain a “permit modification” before the expiration of their original permit.
To obtain a construction permit, a landowner or their legal representative must provide the following documents: A title deed for the property, a survey plan, an outline plan and general plan, and a financial clearance for the property. There must also be a geotechnical report, a plan showing the surrounding streets, as well as a document showing the building setback regulations the property is subject to. Finally, the property owner must provide a technical supervision contract from an engineering office, architectural and construction plans for the building, an accounting form, and engineering, electrical, and mechanical plans approved by the Syndicate of Engineers.
The landowner submits their request for a permit to the head office of their local administrative unit’s council. From there, the application is sent to the council’s construction permits unit, which studies the documents and refers them to the Engineers’ Syndicate, the Electricity Company, the General Establishment for Water and Sanitation and the Department of Antiquities to obtain their necessary approvals. Subsequently, the applicant pays the fees, and their file goes to the temporary registry department of the Department of Cadastral Affairs to complete permit registration. At this point, the permit is considered valid, and the approval and construction plans are sent over to the property owner.