Mumbai Residents Rejoice: Stamp Duty and Registration Fees Waived for Cluster Redevelopment

In a landmark move aimed at simplifying urban redevelopment, the Maharashtra government has decided to waive stamp duty and registration charges for residents of old buildings who will receive new flats under the cluster redevelopment scheme in Mumbai. This announcement, made just before the important Brihanmumbai Municipal Corporation (BMC) elections, is expected to remove financial difficulties and expedite redevelopment projects across the city.

The waiver applies to all residents who will get a flat ranging from 400 to 600 sq. ft. under the scheme. An official order to this effect was issued by the Inspector General of Registration and Controller of Stamps on 18 November 2025.

State Revenue Minister Chandrashekhar Bawankule highlighted the significance of the decision. “The decision would bring relief to residents who dreamed of owning a home in Mumbai and would also help boost cluster redevelopment in the city,” he said.

Cluster redevelopment involves the transformation of multiple old and unsafe buildings into a single, larger project. This approach not only enhances urban infrastructure and housing quality but also offers developers benefits such as higher Floor Space Index (FSI), modern amenities, and the ability to construct safer, larger homes.

Previously, residents were required to pay stamp duty and registration fees on any additional area they received during redevelopment. This additional area was often calculated based on construction costs or ready reckoner rates, making the process expensive. “So far, the residents of old buildings had to pay stamp duty and registration fees on the increased area received after redevelopment, which was based on the construction cost or the ready reckoner rate,” a senior revenue official said.

Under the new scheme, the combined valuation of the original area, additional area, and extra construction area will now be calculated at a concessional rate, significantly reducing costs for both residents and developers.

Bawankule explained that each tenant is entitled to a minimum of 35 square metres of carpet area under cluster redevelopment. Depending on the size of the cluster, residents can receive an additional 10% to 35% extra area along with 35% fungible area—additional permissible construction space. “All this additional area will now be treated as area received in exchange for the old premises and will be valued at a nominal rate,” he said.

The financial gains are quite impressive. For example, in a redevelopment project of a small cluster of about 4,000 square meters, concessional rates will now be available for plots up to 51.975 square meters, thus cutting developers’ expenses by around ₹21.14 lakh per project. In a vast project area of 50,000 square meters, the exemption in stamp duty may amount to close to ₹4.36 crore, thereby, the developers, as well as the residents, will make considerable savings.

The minister emphasized that these steps will elevate the financial feasibility of the redevelopment projects and revitalize the cluster projects that have been stagnant for a long time in Mumbai. As the upfront costs are lowered, the new policy offers a win-win situation to developers by giving them the green light for the redevelopment of old and unsafe buildings, paving the way for safer and more modern housing facilities.

The announcement's timing caught the attention of politicians. The chief spokesperson of Mumbai Congress, Sachin Sawant, said that the BJP thinks of voters only during elections. The decision would have been taken right after the new government was formed. However, they waited for a year to announce it just before the polls.

While Mumbai is still grappling with aging infrastructure and the housing demand is on the rise, such a reprieve could be instrumental in enabling an impressive urban transformation. The cluster redevelopment plan, along with the stamp duty and registration fee waivers, helps residents overcome financial challenges and plays the role of a promoter for more eco-friendly and orderly development of the city.

By implementing these reforms, residents in aged buildings of Mumbai now have a better opportunity to move into safer and modern housing, and developers are motivated to undertake large-scale redevelopment projects. The public-private partnership in city planning, as reinforced by the Maharashtra government's decision, may very well be the turning point that revitalizes Mumbai's urban landscape and serves the public interest.