Punjab Real Estate Approvals Get Costlier as Development Charges Surge Up to 260%
Real estate project approvals across Punjab’s 167 civic bodies are set to become significantly more expensive after the Local Bodies Department implemented a steep hike in development charges. These charges—unchanged since 2017—have now increased from 150% to 260%, dramatically raising the cost burden on residential, commercial, and institutional project promoters.
The revised fee structure, which includes external development charges (EDC), change of land use (CLU) fees, licence fees, and other mandatory levies, stems from a six-month-old Housing and Urban Development Department notification. Adding to the financial strain, the new rates have been applied retrospectively from July 2025, compelling urban local bodies (ULBs) to recover the outstanding amount from developers.
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Cities surrounding Chandigarh—such as Mohali, Zirakpur, Kharar, and Dera Bassi—are experiencing the steepest hikes due to rapid urbanisation and a high volume of real estate activity. For instance, the development charges for a residential colony in Mohali have skyrocketed from ₹36 lakh to ₹1.28 crore per acre, while group housing and commercial projects now cost ₹3.65 crore and ₹4.60 crore per acre, respectively.
Ludhiana and Jalandhar have also seen substantial increases, with new rates rising between 162% and 264% for residential projects. A residential colony in Jalandhar will now incur ₹52 lakh per acre, up from ₹19.68 lakh, whereas commercial projects will cost developers ₹1.36 crore per acre compared to the earlier ₹51 lakh.
With such massive hikes, experts predict that the increased financial burden on developers is likely to translate into higher property prices for end-users. The real estate sector across Punjab now anticipates a wave of recalculations in project budgets, pricing strategies, and investment planning as the new approval cost regime comes into full effect.
