The Telangana Legislative Assembly on Saturday passed the Core Urban Region (Integrated Governance) Bill, 2026, which replaces the Greater Hyderabad Municipal Corporation (GHMC) Act, 1955, and seeks to unify governance and civic planning across Hyderabad’s core urban region.
Framework aims at integrated governance for expanding metropolis
The Bill proposes a coordinated governance framework to bring the three municipal corporations and multiple agencies operating in the core urban region under a common institutional structure. The government says the move is aimed at integrated planning and streamlined delivery of civic and infrastructure services for an area that has outgrown the 1955 law.
Government statements during the Assembly session noted that the Core Urban Region (CURE) area covers the municipal corporations of Greater Hyderabad, Cyberabad and Malkajgiri, and serves a population that has grown to nearly 1.3 crore, far exceeding the population envisaged by the 1955 legislation.
Property tax regime shifted to capital-value system with transition cap
A central provision of the Bill replaces the existing Annual Rental Value (ARV) method of levying property tax within GHMC limits with the Capital Value System (CVS), already in force elsewhere in the State. To address concerns about sudden tax hikes, the government amended the draft before passage to limit year-on-year increases during transition.
Under the amended transition clause, the annual increase in property tax for any property will be capped at 10% of the tax payable in the preceding year until that property reaches its benchmark tax under the CVS. Earlier drafts had proposed a 20% cap.
| Item | Details |
|---|---|
| Residential property tax rate (CVS) | 0.15% of capital value |
| Non-residential property tax rate (CVS) | 0.75% of capital value |
| Annual transition cap | 10% of prior year tax payable |
Officials illustrated the impact with an example given in the Assembly: the annual tax on a 375 sq ft structure occupied by a poor household would be around ₹101 under the CVS, the minister said during debate.
Government defends move as necessary for metropolitan governance
IT and Industries Minister D Sridhar Babu, while speaking during the session, argued that fears of an abnormal rise in property tax were unfounded and that the legislation would establish a uniform capital value-based approach across the region. The minister also said the move was required to address governance problems arising from fragmented administration in a rapidly expanding metropolitan area.
Proponents contend the CURE Bill will enable better coordination on urban planning, transport, water supply, sewage, land use and infrastructure investments by bringing municipal corporations and state agencies into a single governance framework.
Implications for residents and municipal finances
For property owners, the immediate implication is a shift in tax computation from rental-value assumptions to market-linked capital values. The 10% annual cap in the transition period is intended to limit short-term fiscal shock to households and small businesses while allowing municipal bodies to move gradually to values that reflect present market rates.
For municipal finances, the CVS is generally expected to broaden the tax base and yield more predictable revenues aligned with property market appreciation, which could be used to fund infrastructure in fast-growing suburbs. The Bill also signals the State's effort to standardise taxation across jurisdictions that today follow different methods.
Next steps and implementation
The legislation now awaits administrative provisions and rules that will detail valuation methods, timelines for reaching benchmark taxes, grievance-redressal mechanisms, and special provisions for vulnerable households. Implementation will require property revaluation exercises and capacity building in municipal assessment departments.
As Hyderabad and its adjoining municipal areas continue to expand, the new law marks a significant overhaul of governance and revenue systems designed to match urban management with current demographic and economic realities.
