The government has introduced a policy aimed at providing relief to real estate developers who have been unable to sell housing and apartment units due to land ceiling restrictions.

The new policy, included in the budget for fiscal year 2025-26, allows the sale of housing and apartment projects developed on land holdings that exceed the legal ceiling, provided the projects had prior approval. This also applies to land previously registered under various industries and companies to avoid government acquisition.

To facilitate this, the government has already tabled a bill—Land-Related (Eighth Amendment) Bill 2025—in the current session of Parliament. The bill proposes amending Section 12(6) of the prevailing land act, which currently bars institutions from selling land held in excess of the legal ceiling even if it is registered for cooperative farming or under institutional ownership.

Under the proposed amendment, companies permitted to engage in real estate development will be allowed to develop and sell plots, houses, or apartment units on land within the limits prescribed by the government’s notice, even if held in institutional names.

The bill also aims to eliminate legal ambiguity around whether such companies can sell developed housing units on land held within the notified ceiling. Though existing laws allow the transfer and exchange of land under company names, they had not explicitly authorised the sale of housing units developed on such land.