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The Maharashtra government has reintroduced benefits for converting leasehold plots to freehold at a reduced rate, reinstating concessions that were briefly retracted in March. Under the new rules effective from June 28, housing societies can convert their plots by paying just 5% of the Ready Reckoner (RR) rate if they choose self-redevelopment, with a requirement to allocate 25% of new area to affordable housing under PMAY. Alternatively, a 10% RR rate fee is available for builder-driven redevelopments. This initiative impacts approximately 1,600 leasehold plots in Mumbai and 1,800 statewide, aiming to enhance property ownership and support affordable housing.
The Maharashtra state government has announced a significant benefit for housing societies situated on leasehold plots by allowing them to convert their properties to freehold at a reduced rate. This initiative offers landowners a chance to secure ownership more affordably, similar to the concessions previously extended to societies on collector's land. Advertisement
In March, the government had initially issued these benefits but retracted the offer just two days later. However, with a renewed gazette notification on June 28, the government reinstated the concession for leasehold plots, providing hope for many housing societies eager to upgrade their land status. As of now, Mumbai is home to about 1,600 leasehold plots, with the total number across Maharashtra reaching 1,800. Additionally, there are approximately 1,400 housing societies on collector's land within Mumbai and around 22,000 statewide.
Under the new rules, housing societies that choose self-redevelopment can convert their leasehold plots to freehold by paying just 5% of the Ready Reckoner (RR) rate. However, there are specific conditions attached. Societies must allocate 25% of any additional area gained from the redevelopment for affordable housing under the Pradhan Mantri Awas Yojana (PMAY). Furthermore, redevelopment projects must commence within two years following the conversion. If a society fails to initiate the project within this timeframe, the land will revert to its original leasehold status, and any fees paid for conversion will not be refunded.
For those opting for a builder-driven redevelopment approach, a 10% fee of the RR rate can be paid, a pathway preferred by many society members. VC Kapoor, a resident of the Band Stand Cooperative Housing Society in Bandra, highlighted this preference, noting that many residents are reluctant to share land for the PMAY initiative and thus favour the 10% conversion option.
The changes have been welcomed by various stakeholders. Selil Rameshchandra, founder of the Federation of Grantees of Government Land (FGGL), praised the inclusion of leasehold societies in the conversion scheme. He expressed concerns about the attached conditions, asserting that many societies, most of which are over 50 years old, are in urgent need of redevelopment. He suggested that eliminating conditions would better serve the interests of the communities involved.
The government's action aims not only to facilitate property ownership but also to promote urban redevelopment and affordable housing in Mumbai. As populations grow and housing demands increase, this initiative addresses the pressing need for modern infrastructure while also supporting the affordable housing agenda set forth by the government.
While these changes bring hope, the complexities involved in redevelopment will require cooperation and participation from all members of housing societies to navigate the benefits effectively. Several meetings and workshops are expected to be organised to guide societies through the conversion and redevelopment processes, ensuring that residents understand their rights and responsibilities under the new framework.
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