MHADA Revamps Mumbai's Old Housing Societies with New Premium Charges and Payment Terms
The Maharashtra Housing and Area Development Authority (MHADA) has revised its 2007 redevelopment policy, updating premium charges and payment terms to make redevelopment projects more financially viable for developers in Mumbai.
MhadaRedevelopmentPremium ChargesReal EstateMumbaiReal Estate MumbaiOct 07, 2025
For projects carried out under Regulation 33(5) of the Development Control and Promotion Regulations (DCPR) 2034, the MHADA has made changes in the premium charges for commercial floor space. The new policy is aimed at ensuring that the premium to allocate commercial built-up area gets determined using a formula that takes into account land rates, market values, and the intended usage.
The new rule will be replacing the previous one that required developers to pay an amount 1.5 times the residential rate for commercial space. Developers argue that this system made projects financially unviable. MHDA officials say that the revised approach is aimed at balancing the residential and commercial market rates. The balance will ensure that a more equitable premium structure is achieved.
According to MHADA, the revision comes after real estate developers' apex body CREDAI–MCHI made efforts highlighting the need for parity between commercial and residential charges and ensuring balanced growth. Moreover, MHADA has also approved developers and housing societies to pay the premium for additional built-up area in four equal installments with interest.
According to MHADA, the revised policy will ensure that projects that are within a plot area of less than 4,000 sq. m can pay the premium in five installments. The first installment, which will be 10% of the total premium amount, needs to be paid within one month from the date of issuance of the Letter of Intent. The remaining four installments, each amounting to 22.5%, will be payable at the end of 12, 24, 36, and 48 months, respectively, along with the applicable interest.
This new policy is expected to provide a significant boost to the redevelopment of old housing societies in Mumbai, making it more attractive for developers and ultimately benefiting the residents of these societies by improving their living conditions and infrastructure.
Frequently Asked Questions
What is the main change in MHADA's 2007 redevelopment policy?
The main change is the revision of premium charges and payment terms for commercial floor space in redevelopment projects, making them more financially viable for developers.
How will the new premium charges for commercial space be determined?
The new premium charges for commercial space will be determined using a formula that takes into account land rates, market values, and the intended usage.
What was the previous requirement for developers regarding commercial space?
Previously, developers were required to pay an amount 1.5 times the residential rate for commercial space, which made projects financially unviable.
How many installments can developers pay the premium in under the new policy?
Developers can pay the premium for additional built-up area in four equal installments with interest, or five installments for projects within a plot area of less than 4,000 sq. m.
What is the first installment requirement under the new policy?
The first installment, which is 10% of the total premium amount, needs to be paid within one month from the date of issuance of the Letter of Intent.
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