Himachal Pradesh Introduces Premium FAR to Regulate Urban Development
Shimla, March 9 (UNI) The Town and Country Planning (TCP) Department has introduced premium Floor Area Ratio (FAR) provisions for real estate and urban construction projects in Himachal Pradesh through the Himachal Pradesh Town and Country Planning (Eighteenth Amendment) Rules, 2026. Two notifications issued on February 27, 2026, were published in the state gazette, bringing new regulations aimed at planned urban development and sustainable construction.
Under the amended rules, developers will now be allowed to purchase additional buildable area beyond the normally permitted FAR by paying prescribed charges. Premium FAR refers to extra permissible floor area granted over and above the standard FAR on payment of a specified fee to the government. This mechanism enables higher density construction in designated areas while generating revenue for urban infrastructure.
According to the notification, the TCP Department has fixed a graded fee structure for availing premium FAR. Developers could obtain additional FAR up to 0.25 by paying Rs 3,000 per square metre. For FAR between 0.25 and 0.50, the fee has been set at Rs 5,000 per square metre, while additional FAR between 0.50 and 0.75 will cost Rs 7,000 per square metre. Officials clarified that the provision will apply only to projects that are yet to begin construction or are currently under construction.
Real estate projects that have already received a completion certificate will not fall under the new rules. Alongside the premium FAR provisions, the department has also made compliance with the Himachal Pradesh Energy Conservation Building Code (HPECBC) 2018 mandatory through the 17th Amendment Rules for commercial, institutional, and real estate buildings having a built-up area of more than 750 square metres. These include hotels, hospitals, educational institutions, and commercial complexes.
The new regulations also mandate electric vehicle charging points in all new commercial and public buildings. To encourage environmentally responsible construction, the government has announced incentives for green buildings, allowing projects that obtain recognized green certification to receive an additional 0.25 FAR free of charge. However, projects failing to achieve the required green rating after claiming the benefit will be liable to pay a penalty ten times the normal fee.
Officials said the amendments are intended to balance urban growth, infrastructure capacity, and environmental sustainability while providing developers flexibility through regulated additional FAR provisions.
