Mumbai, Nov 20 (NationPress) In anticipation of the Brihanmumbai Municipal Corporation (BMC) elections, the Maharashtra government announced on Thursday that it intends to eliminate registration fees for houses sized between 400 and 600 square feet. This initiative aims to assist tenants and residents of older buildings who are transitioning to new structures under the Cluster Development Scheme within the municipality.

State Revenue Minister Chandrashekhar Bawankule stated that this decision is set to offer significant relief to those aspiring to own homes amid the cluster redevelopment process.

"This initiative will benefit millions of families in Mumbai. Furthermore, it represents an ambitious move by the state government that will lessen the financial burden on ordinary citizens by waiving the registration fee, even if the new house area expands by an additional 200 square feet. This will expedite numerous stalled redevelopment projects under the Cluster Development Scheme in the BMC area, ensuring that residents of older buildings receive the larger homes they deserve," Minister Bawankule remarked.

The Minister further explained that previously, residents of older buildings were required to pay stamp duty on any additional area obtained during redevelopment, calculated at either the construction rate or the ready reckoner rate.

However, under the new cluster development guidelines, the original, additional, and excess construction areas available to eligible tenants will now be evaluated at a concessional rate (112 times the rent or whichever is lower).

According to Rule No 33(9)(5)(i) of the Brihanmumbai Development Control Rules 2034, it is required to provide a minimum of 35 square meters of carpet area to residents in cluster developments. Additionally, based on cluster size, between 10% to 35% of extra area and 35% fungible area (authorized extra construction) is permitted. All this extra area will now be treated as land received in exchange for the old land, with its valuation fixed at a nominal rate. This will enhance the economic feasibility of redevelopment projects and facilitate long-delayed cluster projects in Mumbai," Minister Bawankule added.

The new guidelines from the Revenue department indicate that for smaller cluster projects covering a plot of 4,000 square meters/one acre, the previously charged full rate for additional area led to increased stamp duty rates.

"However, with Thursday’s decision, the valuation for the new area (approximately 51.975 square meters) will be assessed at a discounted rate. Developers or societies could save around Rs 21,14,000 on a single project. For larger projects exceeding 50,000 square meters/five hectares, where the number of eligible apartments is greater, the benefits are even more substantial. This decision could lead to direct savings of approximately Rs 4.36 crore in stamp duty for such large cluster projects," Minister Bawankule stated.