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Maharashtra's Deputy Chief Minister, Devendra Fadnavis, has declared an 8.5% interest waiver on the premium applicable to self-redevelopment projects. This will be valid for projects submitted until March 2026. The government has permitted the premium to be paid in installments. But the Brihanmumbai Municipal Corporation (BMC) levies an 8.5% interest on these payments. The waiver aims to facilitate housing societies undertaking self-redevelopment by reducing financial burdens. Currently, societies opting for self-redevelopment on government-leased land must pay a premium equivalent to five percent of the ready reckoner value, with an option to make payments over three years. The initiative is expected to encourage self-redevelopment across Mumbai and other regions in the state.
Deputy Chief Minister Devendra Fadnavis has announced that the 8.5% interest levied on the premium for self-redevelopment projects will be waived. This waiver will be applicable to all such projects whose proposals are submitted until March 2026. Fadnavis, who was in Kandivli to inaugurate a residential building redeveloped by residents through the self-redevelopment model, highlighted this decision as a significant step to support such initiatives. Advertisement
At present, the state government charges housing societies 5% of the ready reckoner value as a premium for self-redevelopment on government-leased lands. Societies are allowed to pay this premium over three years, with an 8.5% interest levied on the total amount as additional charges. Since the premium is required to be paid upfront while construction begins only after two to three years, residents are burdened with both bank interest and premium interest. To alleviate this financial strain, he stated that the premium interest would be waived for a period of three years exclusively for self-redevelopment projects.
However, he emphasised that this waiver would not be extended beyond three years to prevent project delays. He further mentioned that the building should be completed within five years to ensure the scheme is effectively implemented. According to Fadnavis, 1,500 self-redevelopment proposals have been submitted so far, but MHADA has only received 45 proposals, of which 42 have been approved.
In April last year, Purvarang Society in Mulund (East) became the first to successfully complete a self-redevelopment project. Previously, its members lived in small 390-square-foot flats, but they now reside in spacious 3BHK apartments measuring 1,015 square feet. The society also generated over INR 85 crore in pre-bookings of the free-sale components.
The city's redevelopment market is valued at more than INR 30,000 crore. The Municipal Corporation of Greater Mumbai permits the redevelopment of buildings that are over 30 years old. In traditional redevelopment, societies seek the help of reputed builders for redeveloping their society. In contrast, self-redevelopment enables residents to undertake the redevelopment process themselves, ensuring their interests are prioritised and providing them with greater control over the project.
With a growing number of self-redevelopment proposals being submitted, the government's initiative is expected to reshape the city's housing scenario, providing a viable solution for ageing buildings and ensuring timely completion of projects.
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