Real Estate Update: The Punjab government has implemented a decision to increase the EDC, CLU, and other fees levied for approving commercial, group housing, and residential projects in the state’s municipal areas. This decision, initially announced in June 2025, has now been extended to urban areas. Under the new orders, these fees will increase manifold, raising concerns in the real estate sector and the property market.
The Director of the Local Bodies Department has issued a letter to all municipal commissioners, directing them to immediately implement these revised fees. Previously, charges were being levied in municipal areas as per the 2017 policy. While these charges were already applicable in the areas of PUDA and development authorities, they have now been fully implemented in urban areas as well. A circular to this effect was also issued by the Principal Secretary in July.
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In its latest order, the government has also stated that outstanding dues will be recovered at the new rates for all projects approved after June 4, 2025. Municipal commissioners have also been directed to submit an action-taken report by December 15, 2025, and to prepare a list of projects approved in the last six months and issue demand notices to the respective developers.
Exemption from CLU charges for certain categories
The government has fixed CLU and development charges per acre for various categories, but certain categories have been exempted. These include hospitals, hotels, multimedia centers, educational institutions, industrial units, warehouses, and cold storage. CLU charges will not be levied on these categories.
Fees to increase annually
Under the new rules, an additional 10 percent increase will be applicable every year on CLU, license fees, and development charges. Additionally, a separate 5 percent contribution to the Social Infrastructure Fund will be required on all fees. Experts believe that this increased burden will ultimately fall on the general public and could increase the cost of purchasing property.
Real Estate Association Expresses Dissatisfaction
Sunil Katyal, President of the Jalandhar Engineering and Building Designers Association, expressed displeasure over the government’s decision. He said that instead of providing relief to the general public, this sudden increase is a major blow to the property sector. He warned that this risks increasing illegal construction, as people may resort to unfair means to avoid the higher fees. Sunil Katyal demanded that the government immediately withdraw this decision and reimpose fees at the previous rates. He also called the collection of increased fees for old cases unfair.