When the village house becomes… a field | The big upset in the construction of small settlements

Thousands of owners of small plots of land in settlements with fewer than 2,000 inhabitants are suddenly facing an unpleasant reality: their properties, which until recently were considered within the plan and suitable for construction, are now in danger of being converted into agricultural plots without the right to build. The reason is the publication of the new Presidential Decree (PD) for the demarcation of the country's settlements (Government Gazette D 194/15.04.2025), which applies the jurisprudence of the Council of State, redefining with stricter criteria the boundaries and categories of residential zones.

With the new categorization, many areas that were until today considered within limits – based on Prefectural decisions – are declassified, as these decisions were deemed partially arbitrary and the Prefects unsuitable for such decisions as they lack the relevant scientific training. Now, only demarcations that have been made through an approved urban plan and have been approved by Presidential Decree are considered valid. All others are considered "up in the air", causing legal and financial uncertainty for owners.

The essence of the problem is not only about the formal recognition of settlement boundaries. It concerns thousands of families who had invested or planned to build a house on a small plot of land in their village – plots of 300 or 400 sq.m., which were within prefectural demarcations and are now in danger of permanently losing the right to build, unless they exceed 4 acres, as provided for areas outside the plan.

The chronology of a town planning bomb

The problem is not new. Already from the 1980s, the majority of small settlements in Greece (approximately 12,000 in number) had been demarcated not through Presidential Decree, but through simple administrative decisions of the Prefects. These decisions were repeatedly judged by the Council of State as improperly issued, as the Constitution requires an approved urban plan and Presidential Decree to precede.

Characteristic examples:

• Decision 56/2017: Annulment of settlement boundaries in Rethymno

• Decision 1268/2019: Annulment of boundaries in areas of Pelion

• Decision 164/2022: Annulment of settlement extensions in Paros

In all cases, the reasoning of the Council of State was similar: extensions or demarcations without urban planning are considered illegal and cannot form the basis for issuing building permits. The Presidential Decree of 2025 comes to apply this jurisprudence nationwide, distinguishing settlements into zones (A: historical core, B: cohesive parts, B1: scattered) and excluding Zone C, which included disputed areas.

The first reactions: Local communities and owners at their limits

The first reaction came from Crete. The Association of Property Owners of Heraklion Prefecture (ENIDANI) sent a letter to the Minister of Environment Stavros Papastavrou, expressing the anxiety of citizens. The president of ENIDANI and vice-president of POMIDA, Kostas Arapoglou, warned of mass property devaluation, as happened with the abolition of deviations in out-of-plan construction in 2020 (Law 4759/2020).

“These rapid and adverse developments clearly violate the provisions for the protection of property, both of our Constitution and of all international treaties to which our country has acceded,” POMIDA states in an official announcement.

Property owners' associations emphasize that this is not merely a technical problem, but a matter of survival for small settlements. The construction ban causes desolation, increases urbanization, and makes it difficult for civil servants and seasonal workers to find housing in areas with already high housing costs. At the same time, they fear a blow to real estate investments and the granting of Golden Visas.

Reactions in the political scene: New Democracy in introspection

The crisis is not limited to the social level. It has already caused political tension within New Democracy. Local government officials of New Democracy are strongly pushing for changes, as – they say – citizens see their properties losing value. The Central Union of Municipalities of Greece (KEDE) unanimously expressed its disagreement with the Presidential Decree and requested a meeting with the Ministry of Environment and Energy. The issue is taking on dimensions of a "national crisis of small property," with the New Democracy parliamentary group being "up in arms" and the Ministry on the defensive.

Minister of Environment Stavros Papastavrou argued, speaking to ERTNews, that "order is being placed in a decades-long pending issue" and added that the Presidential Decree does not obliterate, but safeguards legal certainty. However, political damage is evident, and several MPs speak of a "gaffe" amidst a difficult period for the government.

What the government is planning: The window of Peri-Settlement Zones

Under pressure, the Ministry of Environment and Energy is preparing a new legislative regulation. At the heart of the solution are the Peri-Settlement Zones (P.O.Z.), special areas that will function as a continuation of settlements at a distance of up to 500 meters and will be defined through Local Urban Plans (TPS). There, building conditions more favorable than out-of-plan (e.g., for properties over 1 acre), but stricter than in-plan, will apply.

The president of TEE (Technical Chamber of Greece), Yiorgos Stassinos, proposes to allow construction on properties of at least one acre: "You should be able to build a specific number of square meters and it should be considered out of plan, but by way of derogation, you should be able to build some residences," he stated on the "Vavel" podcast of ot.gr. He warned of a "sudden death" of construction, which will lead to greater desertification of the countryside.

The ministry, however, announces that no change will be implemented immediately without consultation, and pledges to soon bring the relevant regulation for approval.

Next steps and unanswered questions

The regulation under formulation is expected within the next ten days in Parliament. However, many questions remain unanswered: Which areas will be included in P.O.Z.? How will the "functional relationship with the settlement fabric" be judged? Will there be a provision for properties under one acre?

The crisis revealed the enormous institutional gap in the spatial planning of small settlements, as well as the inconsistency between the legal system and social reality. Small property owners, local communities, and municipalities are seeking a solution that does not sacrifice legal certainty in the name of bureaucratic strictness, but also does not allow the arbitrariness of the past.

Greece has the opportunity to definitively solve a decades-old problem in a fair, sustainable, and realistic way. Whether this opportunity will be seized remains to be seen in the coming period.