Andhra Pradesh Assembly approves Bill for collecting only 50% of VLT during construction period

The Legislative Assembly on Wednesday passed the A.P. Municipal Laws (Second Amendment) Bill, 2026, enabling the government to levy and collect only 50% of Vacant Land Tax (VLT) during the period of construction of buildings in municipal corporations and municipalities, by taking into account the financial burden for builders and developers.

As per the legislation moved by Municipal Administration & Urban Development Minister P. Narayana, the VLT was being currently levied under the provisions of the A.P. Municipalities Act of 1965 and the A.P. Municipal Corporations Act, 1955, on lands not used exclusively for agricultural purposes and not occupied by or appurtenant to a building.

He said that representations received from various stakeholders, including CREDAI and NAREDCO, highlighted that the levy of full VLT during the construction period imposed an additional financial burden on builders and developers, thereby discouraging timely development of urban land and adversely affecting the real estate and construction sectors.

The government had, therefore, issued GO. Ms. No. 90, dated February 24, 2019, permitting the levy and collection of only 50% of VLT during the construction period (applicable from the date of grant of building permission until the issue of occupancy certificate or completion of building, or expiry of validity of permission, including extended validity, whichever is earlier) and duly made clear that the benefit would not apply to unauthorised constructions.

However, implementation of the G.O. was kept in abeyance due to the requirement of suitable statutory backing. Hence, amendment to the aforementioned municipal laws was being made to operationalise the intended policy.