CURE draft Bill proposes 300% property tax on illegal buildings

Draft legislation also suggests higher penalties for plan violations and unauthorised change in property use

The Telangana Government has proposed tougher measures against unauthorised constructions through the draft Telangana Core Urban Region Economy (CURE) – Integrated Governance Bill, 2026, including a proposal to levy 300 per cent property tax on buildings constructed without valid approvals or on unauthorised structures.
The proposal forms part of the draft legislation released for public consultation and is aimed at strengthening compliance with building regulations and promoting planned urban development.

Steeper penalties 

Under the draft Bill, buildings constructed without the required approvals could attract 300 per cent property tax, compared with the existing 100 per cent penalty, if the proposed provisions are enacted.
The draft also distinguishes between different categories of violations. Buildings that were already assessed for property tax before the new law comes into force would continue to attract the existing 100 per cent penalty.
For buildings that received construction permission but subsequently deviated from the approved plans, the Bill proposes graded penalties. Properties with setback violations of up to 10 per cent would attract an additional 25 per cent property tax, while violations exceeding 10 per cent would attract an additional 50 per cent tax.
The draft further proposes a 100 per cent penalty where buildings approved for residential use are utilised for commercial purposes without obtaining the required permissions.

Focus on enforcement

The proposed legislation also seeks to strengthen the powers of municipal commissioners in matters relating to public health and urban governance.
Under the draft, authorities would be empowered to inspect government and private properties, as well as transport vehicles, if conditions are found that could pose a public health risk. Commissioners would also be authorised to seal or temporarily close buildings and premises considered hazardous until corrective measures are taken.

Tax proposals

• 300% property tax on unauthorised buildings (proposed).
• Existing 100% penalty to continue for certain earlier cases.
• 25%-50% additional tax for setback violations, depending on the extent of deviation.
• 100% penalty for unauthorised commercial use of residential buildings.
• Municipal commissioners to get enhanced enforcement powers under the proposed law.