Maharashtra Offers Reduced Rates for Leasehold to Freehold Conversion for Housing Societies
The Maharashtra government has reinstated benefits for converting leasehold plots to freehold, offering landowners a chance to secure ownership more affordably.
MaharashtraLeaseholdFreeholdHousing SocietiesAffordable HousingReal Estate MaharashtraAug 06, 2024
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.
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.
The Maharashtra government's decision to allow leasehold to freehold conversion at reduced rates is a significant step towards facilitating property ownership and promoting urban redevelopment. The move is expected to benefit thousands of housing societies across the state, particularly in Mumbai, where the demand for affordable housing is high.
The Federation of Grantees of Government Land (FGGL) is an organisation that represents the interests of landowners and housing societies in Maharashtra. The FGGL has been actively involved in advocating for the rights of its members and has welcomed the government's decision to allow leasehold to freehold conversion at reduced rates.
Frequently Asked Questions
What is the benefit of converting leasehold to freehold for housing societies?
Converting leasehold to freehold allows housing societies to secure ownership of their land more affordably, similar to the concessions previously extended to societies on collector's land.
What are the conditions attached to the 5% conversion option?
Societies must allocate 25% of any additional area gained from the redevelopment for affordable housing under the Pradhan Mantri Awas Yojana (PMAY), and redevelopment projects must commence within two years following the conversion.
Can housing societies opt for a builder-driven redevelopment approach?
Yes, housing societies can opt for a builder-driven redevelopment approach by paying a 10% fee of the Ready Reckoner (RR) rate.
How many housing societies are expected to benefit from this initiative?
Thousands of housing societies across Maharashtra, particularly in Mumbai, are expected to benefit from this initiative.
What is the purpose of the government's action?
The government's action aims to facilitate property ownership, promote urban redevelopment, and support the affordable housing agenda in Mumbai.
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