Mumbai: Self-redevelopment gets government concession

With the soon approaching state elections, the government has come up with Government Resolution (GR) that caters to only self-redevelopment. The government has doled out a lot of concessions for registered housing societies that will opt for self-redevelopment. This includes one window system, extra FSI and incentives like a time frame for approvals from the planning authorities for carrying out construction of the project.

Self-redevelopment means where the existing housing society comes together to reconstruct their building which has become old and dilapidated. They do not appoint a developer. In most cases the housing societies appoint a development manager to take care of most of the aspects. A development manager would charge a fee unlike a developer who gives extra space to the members and takes away the rest.

The government resolution talks about several concessions for registered housing societies opting for self-redevelopment. The GR said that the buildings that are 30-years-old or more will be eligible for self-redevelopment. The prominent features of the self-redevelopment GR includes, having single window for all approvals that are required and all approvals will be granted within the span of six months of submitting the application. Societies that carry out self-redevelopment will be granted 10% additional FSI along with the permissible FSI as per the Development Control Rules.

Currently the government allows 0.2 FSI with premium to projects on roads less than 9 metres, it to be made 0.4 FSI without any cost. Similarly, TDR will be made available to housing societies at 50% of the rate, and even concessions for premium that the planning authorities levy.

The GR also said that housing societies will be allowed to pay premium to the planning authorities in installments. Several concessions in stamp duty and taxes was also suggested in the GR; for example, if a society completes the self-redevelopment project within the fixed time, they be discounted from Land Under Construction Assessment Tax (LUC Tax). The GR also said that, Rs 1,000 stamp duty like how it is done for PMAY homes, the same be made applicable for the members of the housing society when they carry out the agreement for their new homes. For homes sold in the sale component, the stamp duty shall be as per prevailing rates.

The societies should also be given discounts in GST. There would be government subsidy up to 4% on the loans that these societies can avail for self-redevelopment. Those societies carrying out self-redevelopment shall finish the work within three years of it being approved. Ramesh Prabu chairman, Maharashtra Societies Welfare Association said, "This demand was long due and finally the government has acted on it. This will benefit a lot of housing societies."