In a landmark overhaul of urban land administration, Maharashtra has eliminated the requirement for separate non-agricultural (NA) permissions for properties that already hold sanctioned development approvals, while also scrapping the long-standing annual NA assessment tax. The reforms, applicable across the state, aim to streamline approvals, reduce bureaucratic duplication, and improve the business environment for real estate and infrastructure development.
The changes follow the Maharashtra Land Revenue Code (Second Amendment) Act, 2025, which received the Governor’s assent on December 31, 2025, and were operationalised through a government directive on February 10, 2026. Under the revised framework, landholders with plots within sanctioned Development Plans or Regional Plans and approved building plans will no longer need to seek additional NA clearance from the district collector. Officials noted that the prior system created administrative bottlenecks and imposed dual compliance burdens on property owners. Urban planners and policy experts suggest that removing overlapping approvals could accelerate project timelines and reduce informal practices that often arise from bureaucratic delays. “For developers and homeowners alike, this creates a more predictable and transparent approval environment,” said a senior urban policy analyst. Beyond easing approvals, the government has abolished the annual NA assessment tax, while also waiving all pending dues to date. Observers highlight that this addresses long-standing concerns of double taxation, as property taxes are already levied by municipal authorities.
The reform also introduces a uniform methodology for conversion premiums. Properties converted before 2002 will be assessed based on prevailing 2001 market rates, while post-2002 conversions will follow Ready Reckoner rates for the respective year. Landowners have a one-year window to pay applicable premiums before standard penalties and interest apply. Banks and financial institutions have been instructed not to require separate NA certificates for loan processing where development approval exists under the Maharashtra Regional and Town Planning (MRTP) Act. Revenue and urban development authorities have been directed to formally communicate this change to lending institutions, a move expected to simplify mortgage and infrastructure financing.
The state government will share collected premiums with local bodies, with up to 50% allocated to municipal corporations, councils, and panchayats. Experts suggest this revenue-sharing model could strengthen municipal budgets, supporting local infrastructure and climate-resilient urban projects. Urban economists indicate that these reforms could foster more inclusive city growth by lowering entry barriers for middle-income homebuyers and small developers, potentially accelerating responsible urban expansion. However, ensuring effective monitoring and implementation will be critical to translate policy intent into tangible outcomes for citizens and cities.
