The proposed measures introduce

• self-certification for certain small buildings,
• third-party certification for specified projects,
• higher approval limits for local authorities and
• a simplified process for converting nanjai land in unplanned areas.

These changes could make the approval process more convenient for homeowners, small businesses, industrial entrepreneurs and property developers.

Simplified Certification and Approval for Small Buildings

Self-Certification for Small Commercial Buildings

For the first time, self-certification-based building approval will be introduced for small commercial buildings with an FSI area of up to 1,500 sq ft.

Under this system, eligible applicants can certify that their proposed buildings comply with the applicable building regulations and obtain approval without making repeated physical visits to local-body offices.

Third-Party Certification for Residential Buildings

Third-party certification means an approved professional or agency verifies that a building complies with the required rules before the government issues the approval.

For residential buildings with an FSI area of up to 8,070 sq ft (750 sq m), compliance with building rules can be certified by an approved third party.

Third-party certification means that an approved professional or agency verifies whether the proposed building complies with the required regulations before the government issues approval. Once the certification is completed, building approval can be issued.

Third-Party Certification for Small Commercial Buildings

Third-party certification will also be introduced for commercial buildings with an FSI area of up to 3,230 sq ft (300 sq m).

Approved third parties will verify whether the proposed building complies with the applicable regulations before approval is granted. For small commercial projects, this could significantly reduce the administrative burden associated with obtaining building approval.

Why the New Certification System Is Being Introduced

The common objective of these measures is to simplify and speed up the building-approval process by reducing dependence on repeated visits to local government offices. By allowing eligible applicants to use self-certification or approved third-party verification, the system is intended to:

• Reduce visits to local offices
• Speed up building approvals
• Reduce administrative delays
• Make the approval process more convenient and transparent
• Encourage small-scale commercial activity
• Make it easier to start and operate businesses
• Support MSMEs and small traders

Overall, the new system is designed to shift routine compliance verification away from lengthy government procedures while retaining regulatory oversight.

Faster Approvals for Industrial Buildings

Industrial entrepreneurs will also get a simplified approval mechanism through third-party certification.

The system will apply to industrial buildings located in:

• SIDCO layouts
• SIPCOT layouts
• ELCOT layouts
• Other approved industrial layouts

The proposed limit is 26,900 sq ft (2,500 sq m).

An approved third party will verify compliance with building regulations before the approval is issued. The measure is aimed at reducing the need for entrepreneurs to repeatedly approach district-level offices and facilitating faster establishment or expansion of industrial facilities.

Local Bodies Get Greater Powers for Residential Approvals

Another significant change is the proposed increase in the building-approval powers of local bodies.

Corporations and Municipalities

The approval limit for residential buildings will increase from 10,000 sq ft to 16,140 sq ft (1,500 sq m).

Town Panchayats and Village Panchayats

The limit will increase from 10,000 sq ft to 12,912 sq ft (1,200 sq m).

This means a larger number of smaller residential building applications can potentially be processed directly at the local-body level instead of being referred to higher authorities.

Commercial Building Approval Limits Increased

The approval powers of all local bodies for commercial buildings will also be expanded.

The existing limit of 2,000 sq ft will increase to 5,380 sq ft (500 sq m).

This is particularly significant for small traders and businesses, as more commercial building applications can be handled at the local-body level.

Nanjai Land Conversion Procedure to Be Simplified

The proposed changes also address the conversion of nanjai (wet agricultural) land in unplanned areas.

At present, converting nanjai land for non-agricultural purposes such as residential, commercial or industrial development requires a No Objection Certificate (NOC) from the District Collector.

Under the proposed simplified procedure, the required clearances will instead be obtained from the relevant departments, including:

• District office of Town and Country Planning
• Joint Director of Agriculture
• Water Resources Department
• Revenue Divisional Officer

This is intended to streamline the process by obtaining clearances directly from the departments responsible for the relevant aspects of land use.

Does This Mean Nanjai Land Can Now Be Automatically Converted? NO

The proposed change does not automatically permit development on agricultural or nanjai land. Watercourses, agricultural protections, departmental rules, land classification, planning status and required approvals must still be verified before development.

What These Changes Mean for Property Owners, Businesses and Buyers

Tamil Nadu’s proposed reforms aim to make building approvals faster, more decentralised and less dependent on physical visits to government offices.

Higher local-body limits, self-certification and third-party certification could reduce delays for eligible residential, commercial and industrial projects.

However, simplified approvals do not remove regulatory requirements. Projects must still comply with planning, building, environmental, land-use and departmental rules.

The reforms may ease approval procedures, but due diligence remains essential, especially for agricultural land and environmentally sensitive areas.

❌ These proposed reforms may be modified when they are implemented, based on practical requirements and administrative considerations. Stay connected with Verified Real Estate for the latest updates as these proposals are officially implemented and the detailed rules are notified.

Official announcement:
https://cms.tn.gov.in/cms_migrated/document/announcements/hud_t_ann_2026_27.pdf

TNHB website:
https://tnhb.tn.gov.in/

Disclaimer: This article is based on the Tamil Nadu Government’s 2026–27 Assembly announcement. Project prices, sizes, eligibility, timelines and booking conditions have not yet been released and may change when TNHB publishes the detailed project notifications.

This could help individual homeowners and small residential developers obtain building approval faster through Tamil Nadu’s online Single Window Portal.

What Has Changed?

Under the currently notified scheme, self-certification is available for eligible residential buildings with an FSI area of up to 3,500 sq ft, comprising Ground + 1 floor or Stilt + 2 floors.

The latest announcement proposes to expand it to:

• Residential construction up to 5,000 sq ft
• Ground + 2 floors
• Stilt + 3 floors
• Faster online approval through self-certification

A stilt floor is generally an open floor used for vehicle parking, with the residential floors constructed above it.

Timeline of Tamil Nadu’s Residential Self-Certification Scheme

February 2024: The government revealed plans to introduce self-certification for small residential buildings. Officials also indicated that the scheme could be expanded after assessing its performance.

July 18, 2024: The Housing and Urban Development Department issued G.O.(Ms) No.133, introducing the residential self-certification system.

July 22, 2024: The scheme was formally launched. It initially covered eligible homes on plots up to 2,500 sq ft, with a built-up area up to 3,500 sq ft, Ground or Ground + 1 floor and a maximum of two dwelling units.

August 8, 2025: Through G.O.(Ms) No.118, the scheme was extended to eligible Stilt + 2 floor buildings up to 10 metres in height.

August 11, 2025: The amendment was published in Tamil Nadu Government Gazette Extraordinary No.459.

September 3, 2025: The online facility for obtaining immediate self-certified approval for Stilt + 2 floor residential buildings became operational.

August 28, 2026: Housing and Urban Development Minister P. Rajkumar announced that the eligible area would be increased from 3,500 sq ft to 5,000 sq ft and that Ground + 2 and Stilt + 3 buildings would be included.

Does This Mean Every Stilt+3 Building Gets Instant Approval?

No. Self-certification does not mean that building rules can be ignored. The property and proposed construction must still comply with applicable land-use classification, FSI, road width, setback, parking, height and safety requirements.

Properties affected by CRZ restrictions, waterbodies, government acquisition, road widening, prohibited land use or other planning restrictions may not qualify.

Detailed Government Order Awaited

The Assembly announcement confirms the government’s decision, but the detailed GO and Gazette notification are still awaited. These documents should clarify:

• Permitted plot size
• Maximum building height
• Number of dwelling units
• Minimum road width
• Required setbacks
• Approval charges
• Completion-certificate conditions
• Effective date on the online portal

Applicants should wait for the official notification and portal update before starting construction based solely on the announcement.

Stay Updated with Verified.RealEstate

Verified.RealEstate will closely track the Government Order, Gazette notification and Single Window Portal update for this expanded scheme. We will keep readers informed as soon as the G+2 and Stilt+3 self-certification facility is officially introduced, along with its eligibility rules, charges and application process.

Why This Matters

The expansion can benefit homeowners who want an additional residential floor while retaining the stilt floor for parking. It may also reduce approval delays for independent houses, villas and small residential developments.

However, the responsibility for providing correct documents and following the sanctioned plan remains with the property owner and the registered professional submitting the application.

For years, many applicants, builders, and industry insiders have spoken about an unofficial payment allegedly collected during building approval processes in Tamil Nadu. This payment was commonly referred to as PF, Party Fund, or Katchi Nidhi.

According to reports, the alleged amount was said to be collected on a per-square-foot basis from applicants seeking building approvals. The claim is that during the AIADMK period, this amount was around ₹25 per sq. ft., and during the DMK period, it allegedly increased to ₹27 per sq. ft.

The allegation is serious: applicants were reportedly made to believe that approvals would move forward only after this unofficial amount was paid.

Why This Became a Major Concern

Building approval should be based on documents, planning rules, land use, setbacks, road width, FSI, ownership clarity, and compliance with development regulations.

But when unofficial payments enter the system, the process becomes unfair.

A person with proper documents may still face delay.
A person following the rules may still be pressured.
A genuine applicant may lose time, money, and confidence in the approval system.

This is why the alleged PF/Katchi Nidhi practice became a major concern for property owners, builders, developers, and ordinary citizens.

CMDA’s Move Against Red Tapism

The Chennai Metropolitan Development Authority has now issued directions to officials to avoid delays and process applications within prescribed timelines. The circular specifically warns against red tapism, malpractice, favouritism, and misuse of official position.

The direction covers applications related to planning permission, completion certificates, layouts, reclassification proposals, and other approvals. Officials have also been instructed to monitor pending files daily and record valid reasons if any application cannot be processed within time.

This is important because it shifts the focus back to one basic principle: approval must depend on rules and documents, not unofficial payments.

Not Just CMDA: The Issue Affects Town Planning Too

This discussion is not limited only to CMDA. Similar concerns have also been raised in relation to town planning departments and local approval systems across Tamil Nadu.

For many applicants, the approval journey passes through different levels of local bodies, planning offices, and technical scrutiny. If unofficial payments are eliminated across all these levels, it can make the system cleaner and faster.

The real impact will be seen only when the same discipline is followed not just in Chennai, but across planning authorities and local bodies in Tamil Nadu.

What This Means for Applicants

If this change is implemented properly, applicants may no longer need to depend on unofficial channels to move their files.

Building approval should be granted when:

the ownership documents are clear,
the plan follows planning rules,
the required government fees are paid,
the site satisfies road width, setback, FSI, and zoning norms,
and there are no legal or technical defects.

That is how the system should work.

What Builders and Property Owners Should Do Now

Even if red tapism is reduced, applicants must not assume that every file will be approved automatically. Documentation still matters.

Before applying for approval, property owners and builders should check title documents, patta, EC, survey details, land classification, road access, zoning, FSI limits, and approval eligibility.

A clean system helps only when the applicant’s file is also clean.

Verified.RealEstate can assist property owners, buyers, builders, and developers with document verification, land due diligence, approval-readiness checks, and risk identification before major property decisions are made.

Final Takeaway

The alleged PF/Katchi Nidhi system damaged trust in building approvals because it created fear that files would move only through unofficial payments.

If the new direction is implemented strictly, it can be a major step toward cleaner, faster, and more transparent building approvals in Tamil Nadu.

The rule should be simple: if the documents are proper and the plan follows the law, approval should not be delayed.