By Rohan Khanna · India Property & Hill Stations · Rewritten September 2026; originally published March 2013
The short answer has not changed in fifty years. Under section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972, land cannot be transferred to a non-agriculturist — which, in practice, means almost every buyer from outside the state — without the permission of the State Government. That restriction covers sale, gift, will, exchange, lease, mortgage with possession and the creation of a tenancy.
The longer answer is that the machinery around it is more demanding than most buyers are told, carries a deadline that can cost you the land outright, and is at this moment in front of a Select Committee of the Vidhan Sabha. If you are considering a plot in Kasauli, Kullu or the Shimla periphery, the next few months may change the terms.
What you may buy, and how much of it
Permission is granted under clause (h) of section 118(2), for purposes that are prescribed, each with its own ceiling. The schedule is the part buyers most often have not seen:
Purpose
Area limit
Building a private residential house
Up to 500 sq m
A built-up residential building with land appurtenant to it
Up to 500 sq m
Part of a residential building
Up to 500 sq m
Agriculture
Up to 4 acres, rural areas only
Building a shop
Up to 300 sq m
Industrial, tourism, apartment, hydel, IT and similar projects
As certified by the department concerned
Socially useful activity — education, health, old-age homes, orphanages, sport
As certified by the department concerned
Public-use facilities run for profit — malls, offices, cold storage, petrol pumps
As certified by the department concerned
Five hundred square metres is roughly 5,380 sq ft, or about an eighth of an acre. It is enough for a house and a garden. It is not enough for the orchard-with-cottage that many buyers picture, and the four-acre agricultural allowance is a different permission for a different purpose — one that requires you to farm.
The two-year clause, which is where people lose the land
Read that last phrase carefully. It is not a fine and it is not a revocation of permission. The land returns to the State, and it returns free from all encumbrances — which is to say, free of your mortgage, and of anything else standing between the State and clean title.
For a holiday-home buyer this is the single most consequential sentence in section 118, and our 2013 guide did not mention it at all. Two years is not long to obtain municipal or Town and Country Planning approvals in hill terrain, arrange finance, and get a structure up to the point where the land is demonstrably in use for the sanctioned purpose. Buyers who treat permission as the finish line rather than the starting gun are the ones who come unstuck.
What is about to change — and has not changed yet
On 2 December 2025 the state government introduced the Himachal Pradesh Tenancy and Land Reforms (Amendment) Bill, 2025 (Bill No. 25 of 2025). Among its proposals:
Building leases in rural areas of up to 10 years, extendable, without prior government permission.
Relaxed conditions for non-agriculturists buying approved houses, flats and units in real estate projects, with stamp duty aligned to permission-based purchases.
Up to five years, with penalties, to put land to its permitted use before it vests in the State — replacing the two-plus-one-year window above.
New exemptions for government bodies, housing authorities, statutory corporations and agricultural co-operative societies.
It did not pass. On 5 December 2025, on a request from BJP MLA Randhir Sharma which Chief Minister Sukhvinder Singh Sukhu supported, Speaker Kuldeep Singh Pathania put the Bill on hold and referred it to a Select Committee drawn from both Congress and the BJP, to report back in the budget session.
Two things follow. The law as it stands today is the unamended section 118 — the two-year clause is live, and nothing about buying a flat has been relaxed. And the fact that the government thought it necessary to legislate a relaxation for “approved houses, flats and real estate projects” is itself the clearest indication that such purchases are not currently outside section 118, which is the opposite of what this page used to tell you.
The paperwork
The documentation below is what the revenue department has historically required, and it is the part of our 2013 reporting that has aged best. Treat it as the shape of the process rather than a current checklist — confirm the list with the Deputy Commissioner’s office for your district before you file.
You begin by establishing the purpose for which you are acquiring, under Rule 38-A of the Himachal Pradesh Tenancy and Land Reforms Rules, 1975. With the plot identified, you visit the local patwari with the seller to obtain the revenue record — the latest jamabandi and the tatima shajra. The agreement to transfer is then executed on stamp paper; it need not be registered under the Indian Registration Act at that stage.
You will then need an affidavit, attested by a magistrate, stating that you have not previously acquired land for the same purpose in your own name or a family member’s under section 118(2)(h); that the land is fit for the purpose; and that you will use it for that purpose. The seller gives a parallel affidavit that the transfer will not render them landless, and that if it does they will claim no benefit under any state scheme for landless persons.
For a residential purchase, add: a permanent residence certificate from the tehsildar or magistrate; no-objection affidavits from co-sharers of the land; an NOC from the Public Works Department where the land abuts a state or national highway; an NOC from the Town and Country Planning authority where the Himachal Pradesh Town and Country Planning Act, 1977 applies; an NOC from the municipality in a municipal area; and, if you are a government employee or work for a public undertaking or autonomous body, your employer’s permission.
Applications are made through the district administration — the Deputy Commissioner’s office lists section 118 permission among its services — and the state has been moving the process onto its online single-window portal.
What we cannot tell you
The question every prospective buyer actually asks is how likely permission is, and how long it takes. We could not find published data on the number of section 118 applications made, granted, rejected or pending, or on processing times. The revenue department does not appear to publish it, and we are not going to manufacture a figure. An RTI request to the Revenue Department is the route to a real answer, and if a reader obtains one we would like to see it.
What can be said is that permission is discretionary, purpose-bound, and time-limited, and that the political weather around section 118 has been contested for years — successive governments have defended it while facing pressure to dilute it. A Select Committee report is due in the budget session. Anyone buying between now and then is buying under the old rules.
What we published in 2013
Our original guide, published 29 March 2013, is summarised below for the record. Points 3 and 4 are the statements withdrawn at the top of this page.
1. “A non-Himachali cannot buy agricultural land… even if you want to start your farm or build your farmhouse.” — broadly correct; the four-acre agricultural permission exists but requires the land to be farmed.
2. “Special permissions are granted by the Govt. to outsiders… they would first require a prior permission from the State Government.” — correct, and still the heart of it.
3. “Non-Himachalis do not require any special permission to buy or lease constructed property, flat, etc… only in urban areas and not in rural or agricultural areas.” — withdrawn. Unsupported, and inconsistent with the relaxation the 2025 Bill proposes.
4. “Property ownership of a non-Himachali would be limited only to the constructed area and the land on which this property is built will not be in his ownership.” — withdrawn. The schedule of permitted purposes provides for a built-up residential building together with appurtenant land, up to 500 sq m.
Sources
Himachal Pradesh Tenancy and Land Reforms Act, 1972, section 118, including sub-section (2) clause (h) and the vesting provision quoted above.
Schedule of purposes for which land is transferable under section 118(2)(h), and Rule 38-A of the Himachal Pradesh Tenancy and Land Reforms Rules, 1975.
Himachal Pradesh Tenancy and Land Reforms (Amendment) Bill, 2025 (Bill No. 25 of 2025), introduced 2 December 2025.
The Tribune, 5 December 2025, on the Vidhan Sabha referring the Bill to a Select Committee.
Holiday Home Times, original reporting, 29 March 2013.
This is journalism, not legal advice. Section 118 permission is discretionary and fact-specific, and the law may change when the Select Committee reports. Take a written opinion from an advocate practising in the district before you commit funds.
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