VIJAYAWADA: The government has announced a major relief for plot owners and builders by amending the Levy and Assessment of Property Tax Rules, 2020.
Through G.O Ms. No.86, MA&UD Department, dated April 21, 2026, followed by a Gazette Notification, the State has granted a 50 % waiver on Vacant Land Tax (VLT) during the active construction period of buildings across all Urban Local Bodies (ULBs).
According to the G.O, any plot owner who has obtained valid building permission from a municipality, municipal corporation, or urban development authority will be liable to pay only half of the VLT otherwise applicable.
The concession begins from the date of permission and continues until the earliest of four events: issuance of an occupancy certificate, certification of completion, expiry of permission validity, or expiry of any extended validity. The waiver will not apply to unauthorised constructions, ensuring that compliant projects benefit.
MA&UD Minister Ponguru Narayana said the decision reflects the government’s commitment to creating a builder-friendly environment. He noted that taxing plot owners at full VLT rates was unfair, and the waiver would accelerate housing projects, bring more land into productive use, and generate employment.
Principal Secretary S Suresh Kumar explained that while VLT was designed to deter speculative hoarding, its imposition during construction discouraged development. The waiver, implemented digitally for transparency, reduces compliance costs and supports timely, authorised projects.
It is expected to boost housing supply, in mid-market segments, by reducing costs during construction. Analysts believe the waiver will improve affordability as developers pass on savings to buyers. It comes at a crucial time, with AP driving rapid urbanisation through Amaravati’s development and expansion of secondary cities.
Safeguards have been built in to prevent misuse, with the waiver restricted to projects holding valid permissions. The government emphasised that the concession is intended to encourage planned, authorised development and will not subsidise illegal constructions. This policy shift is widely seen as a significant push for ease of doing business in the State’s real estate and housing sector.