Mumbai's Housing Boost: How Fee Waivers Speed Up Stalled Redevelopment

State Revenue Minister Chandrashekhar Bawankule said the state government's decision will provide a relief to citizens dreaming of owning a home during the cluster redevelopment.

"Lakhs of families in Mumbai will benefit from this decision. Moreover, this is an ambitious decision of the state government that will reduce the huge financial burden of the common citizens of Mumbai by waiving the registration fee even if the construction area of a new house increases by 200 square feet. This will speed up the stalled redevelopment projects under the Cluster Development Scheme in the Brihanmumbai Municipal Corporation area. It will ensure that residents of old buildings get the bigger houses they deserve," Minister Bawankule added.

The Minister said that residents of old buildings used to pay stamp duty on the additional area obtained in redevelopment at the construction rate or ready reckoner rate.

However, now in cluster development, the original area, additional area and excess construction area available to eligible tenants will be assessed at the concessional rate (112 times the rent or whichever is lower).

"As per Rule No 33(9)(5)(i) of the Brihanmumbai Development Control Rules 2034, it is mandatory to provide at least 35 square metre of carpet area to the residents in cluster development. Apart from this, depending on the size of the cluster, additional area ranging from 10 to 35 per cent and 35 per cent fungible area (authorised additional construction) is provided. All this additional area will now be considered as the land received in exchange for the old land and its valuation will be fixed at a nominal rate. This will increase the economic viability of redevelopment projects and pave the way for cluster projects in Mumbai that have been stalled for many years," Minister Bawankule added.

According to the Revenue department's new guidelines, for small cluster project spread over 4,000 square metre/one acre plot, earlier additional area was charged at full rate, which resulted in higher stamp duty.

"However, with Thursday's decision with the increased area (about 51.975 square metre) the valuation will be done at a discounted rate. The developer/society will save about Rs 21,14,000 in a single project. For large project of more than 50,000 square metre/five hectares of land, since the number of eligible apartments is high here, the amount of benefit is also huge. This decision will result in direct savings of about Rs 4.36 crore in stamp duty in such a large cluster project," Minister Bawankule said.

- IANS