Maharashtra has permanently abolished the non-agricultural (NA) tax, a move expected to accelerate redevelopment and formalisation of ageing housing societies across cities such as Pune, Mumbai, and Thane. The state government’s decision eliminates recurring annual levies on land and simplifies land-use approvals, a change experts say could significantly impact urban planning and real estate investment.
The reform updates the Maharashtra Land Revenue Code, removing the requirement for separate NA land-use permissions from district authorities when land use aligns with approved development plans or regional plans. Under the revised framework, municipal authorities and development bodies can directly process building and redevelopment approvals, replacing a recurring tax regime with a one-time conversion premium. Industry observers note this creates predictability for housing societies and private developers while reducing bureaucratic overlap between revenue and planning departments. Urban planners and housing federation representatives have described the move as a structural correction, resolving inconsistencies in land administration that existed across similarly zoned urban areas. “Replacing recurring NA assessments with a structured premium enhances transparency, ensures fair revenue collection, and unlocks the potential of underutilised urban land,” said a senior urban affairs consultant.
The one-time premium is scaled according to plot size, with lower charges for smaller urban plots and higher charges for larger holdings, ensuring fiscal balance while promoting redevelopment. Experts highlight that this mechanism could incentivise long-delayed projects in inner-city neighbourhoods, improve housing stock quality, and stimulate construction activity in sustainable, climate-resilient formats. However, some legal observers have raised concerns about provisions that retrospectively apply to lands converted to NA use over the last 25 years, arguing that arbitrary levies could affect longstanding landholders. Municipal authorities are expected to manage digital updates to land records, eliminating the need for separate conversion certificates for property transactions or financing.
Analysts anticipate that the reform could ease constraints on mixed-use and residential redevelopment, facilitate densification in older neighbourhoods, and align urban growth with development plans. By reducing dual controls and simplifying approvals, the measure may also enhance private investment confidence in Maharashtra’s urban real estate market while addressing legacy administrative inefficiencies. While implementation will require careful monitoring to avoid unintended burdens on certain landowners, the broader effect is likely to support inclusive, people-first urban growth, streamline redevelopment, and promote responsible expansion of housing infrastructure in the state.
