Law on the Establishment of New Cities

Article 1 - A new city refers to population centers that, within the framework of the plan approved by the Supreme Council of Urban Planning and Architecture of Iran (hereinafter referred to as the Supreme Council), are located outside the legal boundaries and protective limits of cities (whichever is larger) and are designed to accommodate at least thirty thousand people, plus the necessary public, service, social, and economic buildings and facilities for its residents.
Note - The subject of Article (1) is solely for the construction of new cities and does not negate the laws and regulations related to territorial divisions.
Article 2 - The location of new cities shall be determined in accordance with government policies and within the framework of national, regional, and district physical plans based on the proposal of the Ministry of Housing and Urban Development and approval of the Supreme Council.
Note - After approval of the location for construction of a new city, the Ministry of Housing and Urban Development may, as necessary, proceed with the acquisition of required lands and properties according to current laws and regulations, and non-governmental applicants may also proceed with purchasing required lands and properties according to current regulations.
Article 3 - Preparation of the comprehensive plan for new cities shall be the responsibility of the applicant after obtaining initial approval from the Ministry of Housing and Urban Development and based on approved government policies. Approval of the said plan is among the legal duties and authorities of the Supreme Council.
Note - All relevant executive bodies are required to cooperate in providing information to the applicant and those involved with the comprehensive plan of new cities.
Article 4 - Detailed plans of the new city and its subsequent changes, as well as subdivision maps of new lands, shall be approved by the Commission under Article (5) of the Law Establishing the Supreme Council of Urban Planning and Architecture of Iran - approved on 12/22/1351 - upon proposal by the New Cities Development Company (hereinafter referred to as the Company) or the applicant. In the composition of the said Commission until the establishment of the municipality, the Managing Director of the New City Development Company, which is formed according to laws and regulations for the construction of the new city (hereinafter referred to as the Affiliated Company), shall be present instead of the mayor, and if the city council has not yet been formed, the head of the city council of the relevant county shall participate in the Commission.
Article 5 - All ministries, the Law Enforcement Force of the Islamic Republic of Iran, governmental institutions and companies, and other companies and institutions whose inclusion in the law requires mentioning their names, are required to cooperate in creating the new city and plan and take action to provide funding in such a way that, proportional to the progress of construction and settlement operations in the new city, required services are provided based on tariffs of similar cities to the new city.
Note - Affiliated companies or applicants for creating a new city are required to provide their owned lands with educational use according to Article (18) of the Law on Formation of Education Councils in Provinces, Counties, and Regions of the Country and its annexes - approved on 10/26/1372 - and other service uses (except lands with commercial use) free of charge, as necessary, to governmental service-providing bodies, municipality, and water and wastewater companies. Changing the use or transferring the said lands to others is prohibited. Investment from the company's internal resources for creating educational, service, cultural, and religious spaces will be counted against the company's final taxes.
Article 6 - Government-affiliated companies provide current and development credits needed for the new city for construction and implementation of public service plans of the same new city each year from the sale of land and other financial resources.
Article 7 - The Company may transfer credits and income between government-affiliated companies to help loss-making government-affiliated companies and cover its costs with the approval of the company's general assembly.
Article 8 - The Company or affiliated companies may, before the establishment of the municipality, issue permits for subdivision, separation, and development to owners of lands exceeding one thousand square meters in area that are located within the new city's boundaries based on use and regulations of the comprehensive and detailed plan, provided that the owner transfers their service share of lands free of charge to the relevant company for providing necessary spaces for roads, services, facilities, and urban equipment according to the per capita rates of the comprehensive plan approved by the Supreme Council.
Article 9 - The Company or affiliated companies and builders of new cities may subdivide, prepare, and transfer their purchased and acquired lands according to uses of comprehensive and detailed plans to natural or legal persons. The conditions of applicants, method of determining prices, conditions of transfer, method of final transfer, and method of maintaining the new city until the establishment of the municipality shall be determined by the executive bylaw of this law.
Article 10 - Proper implementation of the new city plan in accordance with plan regulations and rules, issuance of construction permits, completion certificates and non-violation certificates, preservation and protection of lands, and maintenance of the city and collection of specified fees (according to the Law on Collection of Some Government Revenues and Their Use in Specified Cases) within the legal boundaries and protective limits of the new city until before the establishment of the municipality shall be the responsibility of affiliated companies or builders of new cities.
Article 11 - Investigation of construction and urban planning violations within the legal boundaries and protective limits and other laws related to municipalities of new cities until before the establishment of the municipality shall be the responsibility of the Commission under Note (2) of Clause (3) added to Article (99) of the Municipalities Law upon announcement by the affiliated company or builder of the new city, which shall investigate the matter considering the regulations of the comprehensive plan of the new city and issue a ruling for demolition or fine equivalent to fifty to seventy percent of the current price of the constructed property. In case of fine, the resulting revenues shall be deposited to the builder's account or through the treasury to the affiliated company's account to be used for public services of the new city. In any case, until investigation of construction and urban planning violations in the said Commission and issuance of ruling, the builder of the new city is required to prevent continuation of violations, and the Law Enforcement Force and other competent authorities are also required to cooperate with the builder of the new city.
Article 12 - The Ministry of Housing and Urban Development is required to inform the Ministry of Interior after ensuring settlement of at least ten thousand people in the new city. The Ministry of Interior is required to take action to form the city council and establish the municipality in the said new city even if the new city plan has not been completed. After establishment of the municipality, the affiliated company or builder of the new city is required to deliver public spaces (green spaces, parks, roads, squares, passages, cemetery, and mortuary) provided for in the plan and infrastructure facilities after completion and preparation of maps and documents related to issued permits and certificates and construction phase maps free of charge to the municipality. From this date, the new city shall be considered among other cities of the country.
Note - With the establishment of the municipality, the Company or affiliated companies or builder of the new city shall still be required to implement development, construction, and transfer of their lands according to the approved plan of the new city and in compliance with municipal regulations.
Article 13 - Construction of a new city by the non-governmental sector requires obtaining a construction permit from the Ministry of Housing and Urban Development after approval by the Supreme Council, and necessary supervision of the construction process shall be carried out through the said Ministry as necessary. Determination of the supervision fee tariff shall be implemented based on the proposal of the Ministry of Housing and Urban Development and approval of the Council of Ministers.
Article 14 - All new cities that have been created based on legal permits until the time this law becomes enforceable are subject to the provisions of this law.
Article 15 - The executive bylaw of this law, including how to support the creation of new cities, provide necessary discounts, and other matters considering the resources provided in the annual budget, shall be approved by the Council of Ministers based on the proposal of the Ministry of Housing and Urban Development.
Executive Bylaw of the Law on Establishment of New Cities
The Council of Ministers in its meeting dated 5/15/1382, based on proposal No. 2/100/1879 dated 4/18/1381 of the Ministry of Housing and Urban Development and pursuant to Article (15) of the Law on Establishment of New Cities - approved in 1380 - approved the executive bylaw of the said law as follows:
Chapter One - Definitions, General Provisions, Regulations and Rules Related to Establishment of New Cities
Section One - Definitions
Article 1- Terms used in this bylaw shall have the following meanings:
1. Law: Law on Establishment of New Cities - approved in 1380
2. Supreme Council: Supreme Council of Urban Planning and Architecture of Iran.
3. Parent Company: New Cities Development Company (Specialized Parent)
4. Affiliated Company: New City Development Company, affiliated and subsidiary of New Cities Development Company (Specialized Parent).
5. Non-governmental Applicant: Non-governmental applicant for permit to establish new city.
6. Executor, Urban Planner or Builder of New City: Governmental builder or authorized non-governmental applicant.
7. Land Preparation: Determination and marking, leveling and asphalt paving of roads, collection and disposal of surface water
8. New City Boundaries: That part of lands located for establishment of new city that is specified and approved by the Supreme Council in the comprehensive plan of the new city for residence and creation of buildings and facilities required for public, service, social and economic needs in a specific time period.
9. Protective Domain of New City: That part of lands surrounding and connected to the new city boundaries where supervision and control of any construction activity and development is necessary for preservation of the city and its planned long-term development. The said domain shall conform to the protective limits of new cities and must consider the boundaries of existing villages based on rural development and construction plans.
Section Two - General Provisions, Conditions, Regulations and Common Rules for Governmental Sector and Non-governmental Applicant for Establishment of New City.
Article 2- Necessity and location of establishment of new city with determination of population ceiling (minimum thirty thousand people) shall be approved by the Supreme Council based on the proposal of the Ministry of Housing and Urban Development in accordance with government policies within the framework of national, regional or district physical plan.
Article 3- In cases where necessity of establishment of new city has not been approved in national and regional physical plans, location studies shall be carried out within the framework of district studies or special plans, subject to Resolution No. 55837/T21414H dated 10/20/1378 of the Council of Ministers.
The result of these studies must include finding the most suitable location considering the intended population ceiling and necessary level for establishment of new city and its domain as part of lands connected to new city boundaries where supervision and control of any construction activity is necessary for preservation of new city. Also, the boundaries of the protective domain of new city must be determined and specified on the map. This map shall also be approved by the Supreme Council based on the proposal of the Ministry of Housing and Urban Development.
Article 4- In cases where district plan has been previously prepared and only necessity of establishment and population ceiling of new city has been approved in this plan or higher-level plans, location studies shall be prepared as per the above article on a case-by-case basis at district level and considering the approved district plan and shall be proposed by the Supreme Council Secretariat to the Supreme Council for review and approval.
Article 5- In cases where, due to special conditions, lands located for establishment of new city are within the boundaries of more than one section or larger territorial units, the Supreme Council shall determine which section or county the new city shall be considered part of when approving the location plan after obtaining the opinion of the Ministry of Interior, and subsequently, the Ministry of Interior shall take action to correct the boundaries of the relevant section or county through legal procedures.
Article 6- Preparation of comprehensive plan of new city shall be the responsibility of the builder of new city after notification of the Supreme Council resolution regarding necessity, location boundaries and population ceiling.
Article 7- From the date of approval of comprehensive plan, the new city shall be considered among cities subject to Article (4) of the Law on Engineering System and Building Control - approved in 1374 - and any construction therein shall be subject to compliance with Article (30) of the said law.
Article 8- Review and approval of detailed plans and subdivision maps of lands and their subsequent changes, if they do not fundamentally conflict with the comprehensive plan, shall be the responsibility of the Commission under Article (5) of the Law on Establishment of Supreme Council of Urban Planning and Architecture of Iran - approved in 1351 - in which composition of the said Commission until establishment of municipality, the Managing Director of Affiliated Company and for review of non-governmental applicant's proposal, the Managing Director of Parent Company or his representative shall be present instead of mayor, and if city council has not yet been formed, the head of city council of relevant county shall participate in the Commission. Presence of non-governmental applicant in the Commission without voting right is not prohibited.
Article 9- Builders of new city are required to provide their owned lands with educational use according to Article (18) of the Law on Formation of Education Councils in Provinces, Counties and Regions of the Country - approved in 1372 - and its subsequent amendments and other service uses such as green spaces, cultural spaces, parks, roads, squares, passages, children's playgrounds, cemetery, sports places, religious places, treatment places, fire station, waste collection station and their disposal places, water and wastewater treatment plant locations, law enforcement force location (except lands with commercial use) free of charge, as necessary, to governmental service-providing bodies, municipality and water and wastewater companies after providing time schedule and securing necessary credit for construction of related buildings and facilities and allocating it and proportional to work progress so that they can proceed with construction of required buildings. Changing use or transferring the said lands to others is prohibited.
Article 10- All ministries, Law Enforcement Force of Islamic Republic of Iran, governmental institutions and companies, and other companies and institutions whose inclusion in law requires mentioning their names, are required to plan and take action to secure credit after approval of comprehensive plan of new city and its protective domain for establishment of new city in such a way that they provide required services similar to services provided to other similar cities in the same geographical area proportional to progress of construction and settlement operations in new city.
Article 11- The Management and Planning Organization of the Country is required to include and secure required credits for service-providing bodies in their annual budget in implementation of Article (5) of the Law and Article (10) of this bylaw and considering the phased program and time schedule of implementation of new city and proportional to work progress.
Article 12- Proper implementation of new city plan in accordance with plan regulations and rules, issuance of construction permits, completion certificates and non-violation certificates, preservation and protection of lands, and maintenance of city, collection of specified fees according to Law on Collection of Some Government Revenues and Their Use in Specified Cases - approved in 1369 - within new city boundaries and its protective domain until before establishment and start of municipality work shall be the responsibility of builders of new city as necessary. Builder may use received funds according to related regulations for construction and providing services in new city.
Article 13- Builder of new city is required to prevent encroachments and violations of lands and developments of new city and construction and urban planning violations within city boundaries and its protective domain by requesting Law Enforcement Force to prevent encroachments and violations or continuation of violations, and after forming file regarding construction and urban planning violations, inform the Commission under Note (2) of Clause (3) added to Article (99) of Municipalities Law - approved in 1372 -. The said Commission shall investigate the matter considering regulations of comprehensive and detailed plan of new city and expert opinions of builder of new city and take action to issue ruling for demolition or fine equivalent to fifty to seventy percent of current price of constructed property according to related law. In case of fine, resulting revenues shall be deposited to builder's account or through treasury to affiliated company's account to be used for public services of new city. In any case, until investigation of construction and urban planning violations in said Commission and issuance of ruling, builder of new city is required to prevent continuation of violations, and Law Enforcement Force and other competent authorities are also required to cooperate with builder of new city.
Article 14- Builder of new city may issue permits for subdivision, separation and development including preparation and construction to owners of lands located within new city boundaries based on regulations of comprehensive and detailed plan and land use until before establishment and start of municipality work. Issuance of said permits to owners of lands exceeding one thousand square meters shall be possible provided that owner or owners transfer their service share of lands free of charge to affiliated company and through agreement to non-governmental applicant for providing necessary spaces for roads, services, facilities and urban equipment according to per capita rates of comprehensive plan approved by Supreme Council.
Note 1- If the amount of service share of lands allocated is not suitable for subdivision or proper use, applicant may pay or receive their share as compensation, or agreed services, or equivalent of current expert price.
Note 2- In subdivision and separation of existing gardens within new city boundaries, laws, regulations and rules related to subdivision and separation of gardens must be observed.
Note 3- Carrying out any transaction and transfer by owners whose lands are located within new city boundaries and its protective domain shall not be prohibited after inquiry from builder of new city if comprehensive and detailed plan regulations and land use and other related regulations are observed.
Note 4- Endowments and Charity Affairs Organization is also required to include and consider requirement to observe detailed plan and type of land use in contracts for transfer of endowed lands within new city boundaries and its domain.
Article 15- Housing Foundation of Islamic Revolution is required to prepare or revise and approve rural guidance plans for villages located within protective domain of new city in coordination with its builder and within framework of comprehensive plan in relevant authorities.
Article 16- Builder of new city is required to prepare time schedule and implementation phases of plan from financial, executive and physical aspects and take action according to said schedule after its approval by Ministry of Housing and Urban Development.
Article 17- Builder of new city is required to subdivide and prepare their purchased and acquired lands considering phased program and transfer them according to uses of comprehensive and detailed plans to natural and legal persons. Final deed in buyer's name shall be subject to providing completion certificate. Non-governmental applicant must also observe regulations mentioned in Article (30) of this bylaw in transfer of new city lands in addition to above conditions.
Note - Determination of applicant conditions, method of determining prices, transfer conditions and application of discounts regarding governmental builder companies shall be the responsibility of affiliated companies' general assembly and regarding non-governmental builder companies shall be with the builder himself.
Article 18- Builder of new city may include common maintenance costs of new city until before establishment of municipality in transfer contract or transfer deed in coordination with Ministry of Housing and Urban Development.
Article 19- Land transfer contract documents in new cities shall be considered as official deed in stages related to granting bank facilities and facilities that Social Security Organization grants to law-covered persons or other organizations or credit institutions grant to their customers, and affiliated company may sign prepared documents only for permitting mortgage, and in any case, in case of non-performance of obligations by loan recipient, builder of new city or successor of bank or organization or credit institution lender or any other person introduced by them shall be agreed instead of applicant or buyer.
Article 20- After settlement of minimum ten thousand people in new city, Parent Company shall inform Ministry of Housing and Urban Development based on report of Affiliated Company or non-governmental applicant, and said Ministry shall inform Ministry of Interior after ensuring settlement of said population. Ministry of Interior is required to take action to form city council and establish municipality within maximum six months from date of notification by Ministry of Housing and Urban Development even if new city plan has not been completed.
Article 21- After establishment and settlement of municipality, builder of new city is required to deliver public spaces (green space, parks, roads, squares, passages, cemetery, mortuary) provided for in plan and related infrastructure facilities free of charge to municipality within maximum one month through handover and takeover minutes after completion and preparation of maps and documents related to permits, completion certificates and non-violation certificates issued and construction phase maps. Municipality is also required to accept and observe issued permits, completion certificates and non-violation certificates.
Article 22- From date of preparation of handover and takeover minutes, new city shall be considered among other cities of country and municipality shall be required to provide all services and also prevent construction and urban planning violations according to Article (100) of Municipalities Law and its notes and other related laws.
Note - Following up complaints related to construction and urban planning violations that have been filed with relevant authorities before establishment of municipality until issuance of final ruling shall still be responsibility of builder of new city and collected fines shall be deposited to builder of new city's account.
Chapter Two - Regulations and Rules Related to Parent Company and Subsidiary Companies
Article 23- All affiliated companies shall provide current and development credits needed for new city for construction and implementation of related plans through resources provided in approved annual budget of each company.
Article 24- Investments made or to be made from internal resources of affiliated companies for creating educational, service, cultural, artistic and religious spaces shall be counted as advance tax payment against final taxes of affiliated companies.
Note - All costs incurred or to be incurred by affiliated company for creating spaces mentioned in this article or for providing public services and preparation including construction, maintenance, repairs and operation shall be included in development project credits and its insurance tariff shall be calculated based on development project tariff.
Article 25- For implementation of Article (7) of the Law, credits and revenues of affiliated companies shall be concentrated in an account specified by Parent Company near treasury and Parent Company is required to determine loss-making affiliated companies and take action to transfer credit and revenue between affiliated companies and cover its costs within framework of their approved budget. This credit transfer shall not be considered as revenue.
Chapter Three - Special Regulations and Rules for Non-governmental Applicant
Article 26- Non-governmental applicant is required to submit their application regarding readiness to establish new city specified in approved district plan along with following documents to Ministry of Housing and Urban Development:
1. Declaration of intended area (minimum three hundred hectares) and providing sufficient documents indicating that non-governmental applicant will be able to prepare and secure required lands in case of final approval of plan.
2. Confirmation of Ministry of Jihad Agriculture and Environmental Protection Organization regarding no obstacle to use of intended lands.
3. Determination and introduction of competent urban planning and architecture consulting engineers responsible for preparation of plan and supervision.
4. Commitment letter regarding consideration of required land based on per capita rates of approved comprehensive plan for public roads, green spaces, squares, public and social facilities and non-private equipment and free transfer of owned lands with uses mentioned in Article (9) of this bylaw and observance of all regulations and rules mentioned in law and this bylaw, Supreme Council resolutions and regulations of Ministry of Housing and Urban Development
Article 27- Ministry of Housing and Urban Development shall review the application subject and capabilities of applicant, type and location of lands and provided location after receiving documents and forming file, and shall inform non-governmental applicant of initial approval if approved so that they can proceed with preparation of location plan within framework of district plan and submit it for approval to Supreme Council.
Note- If location of new city has not been specified in approved district plans, non-governmental applicant must obtain preliminary approval before precise location of new city at district level. Preliminary review and decision regarding proposal to establish new city and its approximate location considering national, regional and district physical plans and security, political, social and other requirements and needs of each region shall be responsibility of Provincial Planning and Development Council in center of each province. Final approval of new city location shall be responsibility of Supreme Council.
Article 28- After approval of comprehensive plan of new city, Ministry of Housing and Urban Development shall issue construction permit for new city for applicant. Non-governmental applicant shall not have permission to transfer or assign said permit to another without written consent of Ministry of Housing and Urban Development.
Article 29- Ministry of Housing and Urban Development is required to supervise all actions and construction of non-governmental applicant and proper implementation of comprehensive and detailed plan directly or through Housing and Urban Development Organization of province and in case of observing violation of said plans or non-observance of national building regulations and urban planning rules, shall notify violations to non-governmental applicant and consulting engineer of plan in writing. Also, said Ministry may take action to cancel construction permit of new city after two written warnings (45) days in case of non-cooperation of non-governmental applicant and non-attention to written notices.
Note - Supervision fee tariff shall be approved by Council of Ministers based on proposal of Ministry of Housing and Urban Development.
Article 30- Any type of land transfer in new cities by non-governmental builder before subdivision, preparation and completion of infrastructure operations of each phase and submitting appropriate commitment to Ministry of Housing and Urban Development regarding providing required public services for residents of that phase and continuation of infrastructure operations of subsequent phases is prohibited.
Article 31- In cases where both Parent Company and non-governmental sector are applicants for establishment of a new city, priority shall be with non-governmental applicant.
Article 32- Non-governmental applicant for establishment of new city shall benefit from all advantages and facilities that Ministry of Housing and Urban Development has or will consider for mass housing builders.
Article 33- All provisions of this bylaw shall apply to new cities that have been approved, established and constructed so far.