This story is from January 31, 2018

Redevelopment premium cut: 3,000 housing societies stand to benefit

Redevelopment premium cut: 3,000 housing societies stand to benefit
MUMBAI: The redevelopment premium of housing societies which are on collector’s land in the city and the suburbs has been slashed from 25% to 10%. About 3,000 housing societies on leasehold plots will benefit from the decision.
The amount, collected by the government, is based on the ready reckoner rate. For example, if the ready reckoner rate of a plot is Rs 1 crore, the society/builder will now pay Rs 10 lakh as premium instead of Rs 25 lakh.
In April 2017, the state government framed a policy allowing additional FSI on the payment of a premium of 25% of the ready reckoner rate for the redevelopment of leasehold properties on land owned by the government.
It didn't go down well with housing societies, which approached the government seeking a relaxation, which has now been granted.
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Similarly, the premium for educational institutions or public welfare trusts has been slashed from 10% to 5% in Mumbai and 5% to 2.5% in the rest of the state. Officials from the revenue department said the policy has been tweaked to make redevelopment viable. There are 1,306 such plots in the city and nearly 350 plots in the suburbs. Most of the buildings are 40-50 years old and need to be redeveloped.
But developers undertaking cluster redevelopment or slum rehabilitation on plots in collector’s land will have to pay 25% premium as the FSI (of four) is already higher in such schemes. Officials said regular redevelopment can get a maximum FSI of 2.7.
An official said the state’s revenue will be affected by the premium cut, but it will solve the problems of residents. Between 1950 and 1980, many housing societies were allotted land by the state government. Such land is known as collector’s land. But these societies were made class II occupants or owners of the land, which meant they had to follow several guidelines laid down by the government.
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