Minister of Construction, Transport, and Infrastructure Goran Vesić stated to Tanjug that in practice, the amendments to the Planning Law have taken effect since there were more issued construction permits and new investments in 2023. He also mentioned that many procedures have been shortened.
Vesić reminded that with the amendments, the Law on the conversion of the right of use into ownership of construction land for compensation ceased to be valid.
“With the abolition of conversion, we have enabled the commencement of several major projects. Soko Štark announced a large project for the construction of the Smoki factory in Belgrade, which is a direct consequence of the abolition of conversion, and Philip Morris announced the construction of the Ikos factory in Niš. Additionally, several properties have been sold, including the construction company ‘Rad.’ Claims that conversion is being abolished due to certain businessmen, the Fair, or the Port of Belgrade are baseless,” said the minister.
According to the amended law, the right of use on construction land is converted into ownership without compensation, and the registration of ownership rights is performed ex officio by the authority responsible for state surveying and cadastre affairs.
Vesić explained that before the law’s amendments, bankruptcy administrators, according to the Bankruptcy Law, couldn’t include the right of use in the bankruptcy estate because they couldn’t quantify it, nor could they express conversion with compensation.
“They now perform conversion without compensation, and once it’s carried out, they include that property in the bankruptcy estate. Sales take place, these properties are bought, and whoever buys them constructs something on them. The money deposited into the bankruptcy estate is paid out to employees and other bankruptcy creditors,” said Vesić, adding that a large number of bankruptcies will be successfully concluded through this system.
He added that he expects to see the real effects of the abolition of conversion this year, as it takes some time for the effects to become visible.
Vesić emphasizes that a direct consequence of the law amendments is, for instance, the issuance of 2,682 construction permits in July of last year, which is 13.16% higher compared to the same month in 2022.
In the third quarter of 2023, there was a recorded increase in the value of completed construction works in Serbia by 19.3% compared to the third quarter of 2022.
“The number of construction permits we issued is a direct consequence of the amendments and supplements to the Law on Planning and Construction. With this law, we introduced many shortened procedures, stricter deadlines, and penalties for government officials who do not issue permits on time. We transferred the authority to issue location information to authorized notaries, which was not the case before. We enabled the Republic to take over any case where there is administrative delay,” said Vesić.
He further added that there is now a very clear distinction regarding the protection of cultural heritage. Those dealing with it have a one-year deadline during the plan drafting process to determine what they want to protect. No one can, for example, override their decisions, and what they adopt becomes a part of the plan.
The minister added that regarding the Sava Center, he had heard numerous “empty stories” that the law amendments were introduced so that the state could sell numerous properties, including the Sava Center.
“It turned out that all of that was not true, that it was all malicious, that those people unfortunately, for reasons I do not know, consciously or unconsciously wanted to halt Serbia’s development because they were spreading falsehoods about conversion,” he said.
He mentioned that President Aleksandar Vučić and Prime Minister Ana Brnabić also supported the abolition of conversion with compensation, and it proved that they were right.
Additionally, the amended law stipulates that all owners of buildings in a territory or part of the territory of a local self-government unit that is municipally equipped for construction and use, especially those with existing infrastructure such as water supply, sewerage, gas pipelines, and district heating, are obliged to connect to the existing infrastructure, depending on the purpose of the building.
A penal provision has been introduced stating that a fine ranging from 1,500,000 to 3,000,000 dinars will be imposed as an economic offense on a company founded by the Republic of Serbia, autonomous province, or local self-government unit that does not connect to municipal or other infrastructure within three years from the date the law comes into force.
There are incentives planned for green construction and electromobility aimed at reducing greenhouse gas emissions by using environmentally certified construction materials and equipment, reducing waste production, utilizing renewable energy sources, for all new buildings over 10,000 square meters of gross developed floor area. After obtaining the occupancy permit, they are required to obtain a green building certificate.
The planned incentives for green construction and electromobility
The government, upon the proposal of the Ministry responsible for construction affairs, establishes measures to stimulate green construction from the existing national building fund.
An investor of a building certified as a green construction is entitled to a 10% reduction in the calculated contribution for land development compared to the total determined amount. Upon the finality of the occupancy permit, the investor can submit a request to the competent authority for a reduction in the total determined contribution.
The law introduces a validity period of 10 years for the energy performance certificate of a building or its specific part.
This is a document submitted when issuing the occupancy permit for a building. It introduces an obligation to include the valid energy performance certificate of the building during the notarization of real estate purchase agreements.
If more than 10 years have passed since the issuance of the energy performance certificate of the building, a new certificate is prepared.
For buildings under construction that are being traded, this certificate is not required during the notarization of the purchase agreement itself since it is provided when the occupancy permit is issued and the real estate or part of the real estate is registered in the land cadastre records.
Owners of existing buildings in public ownership intended for public purposes must obtain an energy performance certificate within three years from the law’s effective date. Owners of existing office buildings must obtain a certificate within five years from the law’s effective date.
Owners of existing residential buildings must obtain an energy performance certificate within 10 years from the law’s effective date for the building or its specific part. The local self-government unit within whose territory the building is located will enact a general act within one year from the law’s effective date to regulate the control of compliance with this obligation.
The law establishes the Spatial Planning and Urbanism Agency, which, among other things, establishes and maintains a register of brownfield locations in Serbia. Local self-government units are obligated to provide the Agency with data on brownfield locations within six months from the Agency’s establishment date.
The Agency is obliged, within six months of receiving the data, to compile a Brownfield Location Data Register and make it publicly available.
The content of construction rules contained in planning documents has been expanded, expediting the drafting and adoption of planning documents and introducing additional protections for cultural heritage. A study for the protection of immovable cultural heritage for the needs of drafting planning documents has been introduced.
The scope of location information issuers has been expanded. Previously issued by the body issuing location conditions, it can now also be issued by notaries public or a legal entity or entrepreneur registered for spatial and urban planning document creation, upon request from the party.
The minister responsible for spatial and urban planning will further prescribe the conditions that entities issuing location information must meet.
The Spatial Planning and Urbanism Agency issue location information within the competence of the ministry or autonomous province as entrusted tasks.
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