Greece moves to revive building rights transfer scheme covering 16.4M sqm

The success of the initiative will depend on the market’s capacity to absorb these rights, how they are valued and the legal certainty provided by the new urban planning framework.

The Ministry of Environment and Energy is advancing the first package of studies to establish 194 Building Rights Reception Zones (BRRZs) across 50 municipal districts, seeking to create the conditions for an organised market in development rights through the Digital Land Bank.

According to data presented by Fotini Stefani, head of the Ministry’s Directorate for Spatial Planning Implementation and Built Environment Control, 3,837 active building rights transfer certificates remain outstanding, corresponding to approximately 430,000 square metres.

The total potential supply across the areas under examination is estimated at 16.4 million square metres. In addition to active certificates, this includes rights associated with listed buildings and properties earmarked for public spaces and public-benefit facilities.

This figure does not represent approved additional building capacity. Rather, it reflects an estimated pool of development rights, some of which may prove unusable because of planning restrictions or insufficient demand.

Attica accounts for approximately 10 million square metres, or 60% of the total potential supply. Of this amount, around 208,000 square metres correspond to active certificates, 3 million square metres derive from privately owned listed buildings, and approximately 7 million square metres are associated with outstanding compensation obligations to property owners.

The first phase includes 62 proposed zones in the Northern Athens sector and Eastern Attica. However, the studies estimate that these areas can absorb only around 17% of the potential supply.

In Central Macedonia, 55 zones are proposed, with the capacity to accommodate 55% of the estimated supply of 2.2 million square metres. In Crete, the 32 proposed zones could absorb approximately 37%, while the 12 zones in Magnesia could accommodate around 61%.

In Patras, by contrast, absorption capacity is limited to 8%. In Central Greece and Nafplio, the estimated capacity of the proposed zones exceeds the available supply, reaching 176% and 131%, respectively.

A Mechanism with a Controversial Past

The Transfer of Building Rights scheme was introduced under Law 880/1979, allowing owners of properties subject to building restrictions to transfer their unused development rights to other properties.

The mechanism was originally designed primarily to compensate owners of listed buildings and properties reserved for public spaces, without requiring the state to provide immediate cash compensation. In practice, it also evolved into a tool for increasing buildable floor space in areas with high commercial value.

The scheme became associated with the development of large office buildings in Athens, particularly during the 1980s and 1990s.

Among the developers that capitalised on the framework at the time was Babis Vovos, whose company built an extensive portfolio of commercial properties along Kifisias Avenue.

The ability to acquire additional building rights enabled developers to increase the utilisation of plots in areas where demand for modern office space enhanced the value of every additional square metre.

Implementation of the scheme triggered legal challenges, as additional development rights were transferred without comprehensive urban planning having always been completed in advance. In 1990, rulings by the plenary session of the Council of State imposed restrictions on the transfer of building rights, followed by further legislative interventions in 1995 and 2002.

A notable case involved the office building at 518 Kifisias Avenue, where reports indicate that a reduction in total built floor area was imposed and one floor was removed.

Council of State ruling 2366/2007 marked a decisive turning point in the scheme’s legal history, after which the mechanism remained largely inactive.

How Building Rights Will Be Valued

The reactivation of the Transfer of Building Rights scheme introduces a new valuation mechanism that limits the role of direct private negotiations and shifts the process to the Digital Land Bank.

The monetary value of the transferable square metres will be determined when a property is registered on the platform, based on a set of predefined parameters. These include the zone price, commerciality coefficient, plot coefficient, building coefficient, ground-floor utilisation coefficient and plot utilisation coefficient.

Based on these characteristics, the system will value the development rights and is expected to match them with properties located within designated Building Rights Reception Zones, taking into account the values of both the areas where the rights originate and the areas receiving them.

This approach differs from the previous regime, under which the transfer of rights could be negotiated privately. Under the new framework, valuations will be based on predetermined criteria, with the aim of ensuring greater transparency and consistent treatment of transactions.

The pricing methodology, the rules governing the matching of development rights and the transparency of transactions will be key factors determining whether the new market can operate effectively.