Extended Incentives for Real Estate in Maharashtra
The Maharashtra government has clarified its newly implemented real estate incentives, confirming that the concessional premiums introduced by the preceding administration will remain effective until August 2021. This extension aims to provide more developers with a chance to capitalize on these reduced premiums, expecting a resulting surge in construction project approvals throughout Mumbai during the initial eight months of 2021.
This initiative effectively allows builders in Mumbai to benefit from reduced premiums on additional and compensatory Floor Space Index (FSI). For residential projects approved until August 19, 2020, these premiums are to be paid at approximately 17% of the applicable Ready Reckoner (RR) rates, often called “Circle Rates”. Conversely, commercial developers are required to pay premiums at 20% of the RR rate.
Furthermore, developers opting for concessions will have their premiums calculated based on the current year’s circle rates or the previous year's rates (2019-20). This effectively provides construction projects in Mumbai access to higher concessions compared to the rest of Maharashtra. However, this specific benefit is set to expire after August 19, 2021.
Chief Minister Announces Statewide Construction Cost Reduction
In a recent announcement, Chief Minister Uddhav Thackeray unveiled a series of strategies to alleviate construction costs across Maharashtra. The government has decided to reduce the construction premium levied on new projects within the state by 50%, effective until December 31, 2021.
Mr. Thackeray also convened a meeting with the State Cabinet Infrastructure Committee to discuss a range of infrastructure initiatives for Maharashtra. Deputy CM Ajit Pawar and PWD Minister Ashok Chavan, among other officials, were also present at the meeting.
