A development permits is granted by the local authority for major construction or projects that affect the environment and alter its appearance. This includes, for example, land modifications through earthworks or material extraction, as well as other projects subject to the Environmental Impact Assessment Act.

A development permit must always be in accordance with the relevant planning documents.

A development permit may be granted without a detailed local plan or neighbor consultation if the project is thoroughly described in the municipal master plan. Otherwise, a valid local plan must be in place for the relevant area in order for a permit to be granted. However, the municipalily may grant a permit without a local plan if public consultation with neighboring properties is conducted and the project is in accordance with the master plan in terms of land use, settlement structure and density.

All development permits must be published on Skipulagsgátt, planning portal, regardless of whether the project is subject to environmental impact assessment or is a temporary permit.

Applying for a Development Permit

The municipality is responsible for monitoring compliance with the issued permit.

Validity of Development Permits

Municipalities determine the maximum validity period for development permits. However, if a permitted project does not commence within 12 months of the municipality’s approval for granting the permit, the permit automatically expires, in accordance with Article 15 of the Planning Act. A new application for the project must then be submitted.

Permits for Projects Subject to Environmental Assessment

A development permit for a project covered by the Environmental Impact Assessment Act, may not be issued until the National Planning Agency has either delivered its opinion on the environmental impact assessment or determined that no assessment is required.

When processing an application for a construction permit, the municipality must review the environmental impact assessment report submitted by the developer and base its decision on the National Planning Agency's opinion on the assessment.

The municipality shall make its decision public on the permit, along with its opinion, within two weeks of the permit’s issuance.

Projects Subject to a Permit

Projects listed under the Environmental Impact Assessment Act always require a development permit.
In addition, other projects that significantly impact the environment or change its appearance may also require a permit.

The permitting authority determines whether a project not explicitly mentioned in the Environmental Impact Assessment Act qualifies as major development and therefore requires a permit. In making this determination, consideration is given to the project’s physical size, scope, permanence, impact on landscape and appearance, and other environmental effects and impacts.

Article 7 of the Regulation on Development Permits lists additional types of projects that may require a permit.

Projects not Subject to a Permit

• Projects that require a building permit do not require a separate development permit.

• Projects deemed minor — that is, with negligible impact on the environment or its appearance — are also exempt from requiring a development permit.

If there is uncertainty about whether a project requires a permit, either the applicant or the municipality may request a formal ruling from the Environmental and Natural Resources Board of Appeal.