The closed-loop material approach of the circular economy is deemed to minimise the construction industry’s environmental impacts such as resource depletion and large amounts of waste generation. Local governments or municipalities responsible for regulating the construction industry through building permits offer the opportunity to explore the role of the building permit process in transit from linear to circular economy-based construction practices. This paper aims to identify challenges and enablers to integrating circular economy requirements into the building permit process. Further, to develop a conceptual model to outline the measures towards integrating circular economy requirements into the building permit process. This paper used a narrative literature review methodology. The literature search resulted in the challenges and enablers of the integration of circular economy requirements into the building permit process. The main challenges were current building codes are not flexible concerning the reuse or recycled materials, and limited national-level policies on incorporating circular economy-based practices requirements in building permit applications. To enable the integration of circular economy requirements into the building permit process pilot projects by municipalities, and government roles through developing regulations and building codes are pivotal. The results of this paper are useful for stakeholders in designing the building permit process to achieve sustainable construction projects.