UP govt notifies rules for purchasable FAR fee, fixing levy

The Uttar Pradesh housing and urban planning department has framed new rules for the assessment, levy, and collection of the purchasable floor-area ratio (FAR) fee, providing a standardised framework for developers seeking additional FAR beyond the regular limit, officials said.

The Uttar Pradesh Urban Planning and Development (Assessment, Levy, and Collection of Purchasable FAR Fee) Rules, 2024, were notified on February 28, bringing clarity and transparency to the process, they added.

Purchasable FAR refers to the additional FAR that developers can acquire over and above the basic FAR, as specified in the Master Plan, zonal plans, or building bylaws, by paying an additional fee.

“The rules have finally been framed and notified, paving the way for a smooth flow of procedures related to purchasable FAR fees. The processes have been standardised, and the Ghaziabad Development Authority (GDA) has started working as per the guidelines,” said Rudresh Shukla, media coordinator of GDA.

The rules define different FAR fee factors for various land uses—0.40 for group housing, 0.45 for mixed land use, and 0.50 for commercial projects—ensuring a systematic approach to fee calculation.

A former town-planning officer of the GDA noted that purchasable FAR fees were earlier governed through building bylaws and government orders, leading to legal disputes due to the lack of standardised rules. “The government has finally framed the rules, resolving previous inconsistencies,” he added.

To be sure, the charge payable for purchasing additional floor space in Uttar Pradesh is calculated as by the following formula, where the charge is equal to “(additional floor area required in sqm x 100 / Actual floor area ratio) x Purchasable factor x current rate of land set by the local authority.”

Under the new rules, developers must pay the full FAR fee before obtaining permission under Section 15 of the UP Urban Planning and Development Act.

However, if the purchasable FAR exceeds 1,000 sqm, 25% of the fee must be paid upfront, with the remaining amount payable in quarterly installments within two years, incurring a 12% annual simple interest. In case of default, a 3% annual penal interest will be charged.

The allocation of the FAR fee has also been structured. “90% of the revenue from the purchasable FAR fee will be credited to the authority’s infrastructure development fund, while 10% will remain with the authority,” the rules state.

Previously, the 2008 amended building bylaws required the fee to be credited to a separate account for infrastructure development, subject to a committee’s recommendations, according to officials.

The Confederation of Real Estate Developers’ Associations of India (CREDAI), meanwhile, welcomed the move.

“The new rules will bring more transparency in purchasable FAR fee collection by the development authorities,” said Gaurav Gupta, secretary, CREDAI NCR.

According to officials, the notification follows other recent regulatory updates, including the UP Urban Planning and Development (Assessment, Levy, and Collection of Impact Fee) Rules, 2024, and the UP Urban Planning and Development (Assessment, Levy, and Collection of Development Permit Fee, Building Permit Fee, and Inspection Fee) Rules, 2024, which were notified on January 28.