The State Cabinet of Maharashtra made a major announcement on land conversion in the state; they have simplified the complicated and time-consuming process of converting agricultural land into non-agricultural land. After the execution of the new system the land owners will not need the District Collector’s permission if the land falls within the Corporation and Municipal Council Zone. The process is simplified with an aim to ensure easy acquisition of land for housing projects and other non-agricultural purposes.

Earlier it was mandatory for the land owners to take permission of the Collector for the conversion if the plots are to be developed for residential, commercial or industrial purpose, which lead to rise in delays and corruption. This move will reduce such complaints.

As per the new system, the free hold lands should be located within the limits of the Municipal Corporation or Municipal Council. Land owners will need to take approval of the Civic Body’s Planning Department. Once the Municipal Council grants permission, the land owner needs to inform State Revenue Department in 30 days, after which officials will recover a one-time land conversion tax and a non-agriculture cess.

This process will apply to those who are direct owners of the land. For those who have leased land from the government, the collector’s permission is still required, though the conversion procedure has been made simpler for them as well. The leaseholder will have to offer a certain share of the profitable deal on the land to the government.

According to sources, masses of application for land conversion to non-agricultural use are pending, particularly in Mumbai Region and around, stalling development. In rural areas, where there are no Municipal Corporations or Councils, Revenue Officials will now be asked to create a Databank of conversion applications, so that decisions can be made quickly.




At last, on Tuesday, the 23rd July, 2014, the Congress-led Democratic Front Government fulfilled their promise to extend the Slum Regularisation cut-off date from 1st January, 1995 to 1st January, 2000. Maharashtra State Government issued a Government Resolution (GR). The promise was first made by the Congress in its 2004 in their election manifesto and reiterated in 2009.

It is expected that the decision will be beneficial for around 3.5 lakhs slum dwellers. The slum dwellers will be eligible for the regularization on the basis of the photo identity proof issue by Brihanmumbai Municipal Corporation (BMC) in the year 2001.

The Government has introduced Transfer Processor for those who have purchased the pre-2000 built hut will have to apply for a transfer. For the transfer the slum dweller should be staying there for atleast one year and will have to submit two documents of staying there and also will need to pay Rs. 40, 000 if it is a Residential Slum and Rs. 60,000 if it is a Commercial Slum for obtaining Occupation Certificate (OC).

After the regularization the slums built till 2000 will be eligible to redevelop their area under the existing Slum Redevelopment Authority (SRA) Scheme.

Experts say the move will benefit the Congress Party in the upcoming state assembly elections. It will change people’s perceptions for the party.



The Maharashtra Government, in an attempt to provide balanced playing field to Developers and reduce arbitrary decision-making, has amended the Development Control Regulations (DCRs) for the State Capital City, Mumbai.

The new Development Control Regulations may not be a major bound in countering malpractices completely as we are all aware that many countries have beaten India in diverse fields. However, India has out-beaten all countries in one field and that is Realty and Construction activities where widespread corruption is on the pinnacle since ages. One of the areas of this majestic achievement by established interests of the corporate and politico field is redevelopment of old Housing Societies and Commercial Joints in Metro Cities.

According to the new DCR Amendments, Balconies, Flower Beds, Terraces, Voids and Niches would now be counted in the Floor Space Index (FSI). To compensate for the loss of free-of-FSI areas, Fungible FSI to the extent of 35 per cent for Residential Development and 20 per cent for Industrial and Commercial Developments has been allowed with premium.

Fungible FSI would be available at 60 per cent premium for Residential, 80 per cent for Industrial and 100 per cent for Commercial at the Ready Recknor Rates (RR Rates) which are revised from this January 1st, 2012 ranging between 5 per cent and 30 per cent in 716 zones of Mumbai. Fungible FSI can be used for making Flower-Beds or Voids; else used for constructing bigger habitable areas.

However, to protect the interests of the existing owners and occupiers so as to avoid the transfer of Fungible FSI in respect of existing building to the free sale portion by the Developers, it has also been further clarified that the Fungible FSI in respect of rehab portion would not be transferable to the free sale area of the Developer. No premium for Fungible FSI would be charged for the members whose flats were being redeveloped though the space restrictions would be the same.

The parking would be available as per the provisions of the DCR, but 25 per cent more at the option of the Developer. This would be without premium and without being counted in the FSI.

Beneficiaries of Redevelopment Projects:

One, there is no impact of this Fungible FSI method on rehabilitation. The Developer will not have to pay premium on the area used by the existing member while giving him space in the Redeveloped Project. He is free to use “Transfer of Development Right” (TDR) option.

Two, the fungible compensatory FSI cannot be used for the free sale component and shall be used to give additional area over and above the eligible area to existing members. This relates to many growing families in the cities, where 300 sq ft space currently given after redevelopment is hardly sufficient. The amendment restricts the Developer on selling the extra FSI at market rates. He will have to give additional 35 per cent i.e. 105 sq ft in this case, to the family by charging construction cost, at the most.


Fungible FSI at 60 per cent premium for Residential, 80 per cent for Industrial and 100 per cent for Commercial at Ready Recknor Rates

Redevelopment of 19,000 old and dilapidated buildings get an impetus

More parking to be available without premium and without being counted in the FSI

Balcony to be given on cantilever projection

When you lie flat on your back, the only way to look is up. So is the case with Developers when the Government and BMC are always ready with red carpet to accommodate them at any cost. At a time when demand for property is tepid and cash is hard to come by, Developers are looking at new ways to lure buyers. Building high-rise apartments seems to be the latest gambit to differentiate their projects from those of others.

The Civic Standing Committee of Mumbai had requested the Chief Minister of Maharashtra not to allow any increase in FSI and no high rise structures in Mumbai till 2013. The Committee also stressed not to permit any high rise structures in the city unless and until the new Development Plan (DP) is ready by 2013 and to continue with the current FSI until the DP is ready.

The Committee strongly emphasized the restraint that due to rapid and heavy construction activity in the city; there is heavy load on civic infrastructure. It is being heavily burdened by a lot of construction activity in the city mainly the redevelopment activities for housing societies. There is barely any improvement in water supply, drainage and sewage systems, health and fire services, roads, parking facilities. The slum rehabilitation schemes are adding to the load. With total utilization of increased in FSI, the burden on infrastructure will only increase.

However, contrary to the recommendations of the Civic Standing Committee, the Maharashtra Government, in an attempt to accommodate the Builders/Developers lobby, amended the Development Control Regulations (DCRs) for the State Capital City, Mumbai by introducing the Fungible FSI that now according to the new DCR Amendments, Balconies, Flower Beds, Terraces, Voids and Niches would now be counted in the Floor Space Index (FSI). To compensate for the loss of free-of-FSI areas, Fungible FSI to the extent of 35 per cent for Residential Development and 20 per cent for Industrial and Commercial Developments shall been allowed with premium.

Adding salt and pepper to the soup of the Developers, a further modification is in the offing that any building with a height of 30 meters (Nine Floors) will soon be categorized as a high-rise, an increase of 6 meters from the existing definition (24 meters or seven floors) with a reason that this is mainly to facilitate redevelopment of buildings on small plots, say BMC officials.

This is one of the modifications sought by Municipal Commissioner Subodh Kumar from the State Government last week after Builders and Developers complained of “Planning Constraints”. Once a building falls under the definition of high-rise, it has to comply with a slew of rules, mainly pertaining to Fire Safety Regulations.

In a letter on 26th March, 2012 from the Municipal Commissioner Subodh Kumar to the State Urban Development Department, it has been strongly recommended that the definition of multistoried buildings needs to be revised for buildings with heights over 30 meters and that in buildings up to 30 meters in height, the terrace floor of the building will be treated as the Refuge Area.



The Maharashtra Government is always on a lookout to find new avenues to raise its income. In a move that will further raise the already exorbitant real estate prices in the city; the State has hiked Ready Reckoner Rates for both residential and commercial properties by 5% to 25%, with effect from January 1, 2012. Even as property prices have not gone up much in the past year, total outgo for a new property increased in Maharashtra. The Government has raised the Ready Reckoner Rates by an average of 18 per cent in Mumbai and 5 to 30 per cent in the state.

In specific areas prices of land and property has been fixed as per the government. The calculation is carried out either on the market rate or RR rate, whichever is higher. This means Mumbaiites will now have to pay more Stamp Duty to register the property they buy. Builders will also have to pay higher premiums on the land they purchase which are calculated based on Ready Reckoner Rates which in turn, they will pass on to the buyers. However, the State Government might have to brace for a legal battle with certain segments of the Realty Sector planning to challenge the steep hike in Ready Reckoner Rates in Mumbai High Court.

Ready Reckoner is the market rate of property at which Stamp Duty is calculated. Higher the Ready Reckoner Rate, higher the Stamp Duty and higher your property cost. It differs across areas and cities. If in Worli, Mumbai, it is Rs 25,000 a square feet (sq ft), the Stamp Duty will be Rs 1,250 a sq ft. The Stamp Duty is fixed at five per cent in Maharashtra.

The Ready Reckoner Rate slightly differs from the area’s property price. If the property prices in Worli are Rs 4,000 a square feet, the rate would be Rs 3,500 or Rs 4,500. The rise is highest in Goregaon, Mumbai, at 30 per cent of the 2011 level. In Kurla it has been raised by an average of 15 per cent, compared to 24 % last year.

There is also a catch. The Stamp Duty is calculated as a percentage of either the Ready Reckoner or the property rate, whichever is higher. If the property rate is Rs 10,000 a sq ft and the Ready Reckoner one is Rs 15,000, one will pay duty based on the latter. Experts say property prices have risen and, hence, the rise in the Ready Reckoner Rate. But, if these go down, no one is sure if it will be revised.

The Government’s move comes on the back of lower Stamp Duty collection due to dubious transactions. Many Developers would quote a lower property price on paper, in turn, charging a lower Stamp Duty. If the property price in an area is Rs 10,000 a square feet, the builder would quote only Rs 8,000. As a result, the buyer would pay a lower duty. Experts say these transactions were taking place for premium properties, where the price is very high. Now, with a benchmark rate, dubious transactions could get affected.

This would also lead to higher Capital Gains when selling property. Under Section 50(c) of the Income Tax Act, Capital Gains on the sale of the property are computed on notional value, on the basis of the Ready Reckoner Rate. If you bought a property at Rs 5,000 a square feet and sold it at Rs 10,000, the Ready Reckoner Rate will be Rs 13,000.

The Capital Gains will be calculated on the difference between the Ready Reckoner Rate and the purchase price instead of selling and buying price. Experts say Property Tax is likely to be computed on the Capital Value, going forward. The Capital Value will be based on the Ready Reckoner Rate.

This will lead to increase in property rates, as the property tax will be paid on the capital value. Presently, Property Tax is based on a Rateable Value, which is based on the rent the property is likely to fetch. But, due to the Rent Control Act, the rents are lower, affecting the rateable value.