Redevelopment of over 8000 housing societies in Mumbai gets a push as Maha Cabinet cuts premium to obtain land ownership

Sanjay Jog

In a big relief to the residents of over 8,000 housing societies, which are 50-60 year old, the Maharashtra Cabinet chaired by Chief Minister Eknath Shinde on Wednesday reduced premium 10% from 15% of ready reckoned (RR) value??to obtain ownership of land from Class II to Class I (from leasehold to freehold).?

The premium has been further reduced to 5% of RR value to obtain ownership of land in case of self redevelopment for societies situated in collector or government owned leased lands. The cabinet decision will pave the way for the redevelopment of such buildings as it was not happening for want of cut in premium. The residents of such societies as well as the realty sector had made a series of representations to the government seeking an early decision.

The timing of today’s cabinet decision is crucial as the MahaYuti government comprising BJP, Shiv Sena and NCP plan to win all six Lok Sabha seats in Greater Mumbai.??Besides, this is expected to give a push to the realty sector's development that will help the government to mobilise additional revenue in the coming years.

Mumbai BJP chief Ashish Shelar hailed the state cabinet decision. In his post on X, Shelar said, ‘’Big victory for lakhs of Mumbaikars residing in 8,000+ housing Cooperative societies in Mumbai built on collector lease hold land. Thank Maharashtra Govt led by CM Eknath Shinde ji, DCM Devendra ji and DCM Ajit Dada ji for accepting my demand on behalf of Mumbaikars & resolving this long pending issue.’’

He further noted that ‘’Maharashtra Government reduces premium to 10% of RR value- ( earlier it was 15% of RR value ) to obtain ownership of land & 5% of RR value to obtain ownership of land incase of self redevelopment for societies on collector owner leased land. This will allow residents of these 8,000+ housing societies, whose building are 50-60 year old, to go for bigger homes thru redevelopment.’’

A revenue department officer said that the conversion scheme (converting government land to freehold) was introduced in 2019. For the plots given on occupancy class II (conditional ownership) and for residential use, the tenant had to pay 15% of the total price of the property as per the ready reckoner rates but if it was allotted on lease then the tenant would have to pay 25% of the ready reckoner rates. The government last year had allowed tenants to own government plots by paying 15% of the ready reckoner rates.