Advertisement
Private equity has played a significant role in shaping Indi...
In today’s real estate landscape, fitness is often treated...
In this episode of Prop Personalities, we sit down with Hars...
Luxury real estate is one of the most talked-about segments ...
Welcome to Prop Personalities by Prop News Time - a podcast ...
The Andhra Pradesh government has introduced a 50 per cent reduction in vacant land tax (VLT) during the construction phase, aiming to accelerate building activity and ease cost pressures on developers and plot owners. The relief applies from the commencement of construction until the issuance of the occupancy certificate, subject to regulatory compliance. The policy follows amendments to municipal laws approved earlier this year and is expected to improve project viability, encourage timely completion, and enhance land utilisation across urban local bodies. Industry stakeholders have long flagged VLT during construction as a cost burden, and the move is expected to support housing supply, particularly in mid-income segments, while improving ease of doing business in the state’s real estate sector.
The Andhra Pradesh government has approved a 50 per cent reduction in vacant land tax (VLT) during the construction period, seeking to incentivise development activity and reduce financial pressure on property owners and developers across urban areas. Advertisement
The policy, notified recently following amendments to municipal laws, allows plot owners undertaking construction to pay only half of the applicable VLT from the date of project commencement until the issuance of the occupancy certificate or completion certification. The concession is applicable across urban local bodies and is linked to compliance with approved building permissions.
The move addresses a long-standing concern within the real estate sector, where developers and landowners were required to pay full vacant land tax even after initiating construction. Under the earlier framework, VLT continued to be levied until completion of the project and issuance of occupancy certification, increasing the carrying cost of land during the construction phase.
Officials indicated that the revised framework is intended to encourage timely construction and ensure better utilisation of urban land parcels. The concession is expected to reduce holding costs for developers, particularly in projects with longer gestation periods, and improve cash flow during the construction cycle.
The policy is part of a broader legislative amendment approved earlier this year, which reduced VLT liability by half during the active construction phase. The concession begins from the date of building permission and continues until completion, expiry of permission validity, or issuance of occupancy certification, whichever is earlier.
Government officials stated that the measure would support planned urban development by discouraging land hoarding while ensuring that projects with valid approvals progress within defined timelines. Safeguards have been built into the framework, with the benefit restricted to authorised developments, thereby excluding unauthorised constructions from availing the relief.
The reduction in VLT is also expected to have a bearing on project economics, particularly in residential developments. Lower tax outgo during construction could translate into improved viability for developers and may support pricing stability in select segments, especially in mid-income housing categories.
Industry stakeholders have maintained that high pre-construction and construction-phase costs have historically constrained project execution, particularly in emerging urban centres. The revised policy is expected to improve the ease of doing business by rationalising tax obligations during the most capital-intensive phase of development.
The state government has directed municipal authorities to implement the revised norms uniformly, with an emphasis on transparency and consistency in tax administration.
The development comes at a time when Andhra Pradesh is witnessing ongoing urban expansion across key cities and growth corridors. By easing tax burdens during construction, the policy aims to support faster project execution, enhance supply, and improve overall efficiency in the urban housing market.
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
