The real estate sector, which raked in whopping sales in the midst of the pandemic has delivered ample revenue to the Brihanmumbai Municipal Corporation kitty. According to the BMC, till January 2022, Rs 13,543 crore had been garnered from this sector.
The income to the BMC increased from the projected Rs 2,000 crore to a revised estimate of Rs 14,750 crore. This bonanza was possible because of the 50 per cent concession on premium payments the civic body had offered developers, it explained.
BMC Commissioner Iqbal Singh Chahal said at a press conference that had this concession not been offered, the BMC would have not earned anything. “It was not just done to fill the coffers of the BMC but the main objective of giving 50 per cent waiver in premium payments was to make hundreds of non-viable real estate projects viable. Real estate is the backbone of the economy. The BMC has given a push by granting relief, ultimately leading to the churning of the economy. We had offered this concession for one year,” he explained. Further, he said, the government could not be pushing the economy every time. A stimulus could only be given for some time, not forever he said. He further explained, "Suppose the premium was Rs 100 for a viable project. But since projects became unviable because of the slowing of the economy in the pandemic, the amount would have never come to us because no one was ready to carry out these projects. By slashing the premium from Rs 100 to Rs 50, the project was made viable and the BMC earned some revenue.”
Under its ease-of-doing business initiative, the BMC made all approvals related to construction permit issuance online only. Also, transfer development rights (TDR) generation and its utilisation process have also been moved online.
The BMC estate department expects a revenue of Rs 25 crore in 2022-23 through its renewal of lease policy. In all,129 proposals of redevelopment of municipal tenanted properties under DCRs 1991 and 2034 have been sanctioned, of which Rs 1,394.93 cr have been obtained in the form of capitalised value and an additional Rs 125 crore is expected in 2022-23.
To make the redevelopment of such properties financially viable, the BMC has remodelled its policy for the calculation of one-time premium (OTP). Rs 100 crore in premium is expected in 2022-23.
In addition, the BMC has framed a VLT policy, allowing the conversion of VLTs into leases of 30-year tenure, for areas 25 sq mt and more not falling in slums, tenanted property, reservation and parks. VLT occupiers will get land titleship through lessees and the BMC will earn revenue.
Property tax relief for up to 500 sq ft homes
According to the BMC, there are about 16 lakh houses less than 500 sq ft in area which will get the benefit of complete property tax waiver. This exemption is to the extent of Rs 462 crore.
Stakeholders in the real estate sector have applauded the BMC. Dr Niranjan Hiranandani, vice chairperson (National) NAREDCO and MD, Hiranandani Group said, “The MCGM Commissioner, in his budget presentation has formalised what was announced by the Hon’ble CM. It augurs well for affordable housing and will be a positive move for the common man living in homes sized 500 sq ft or less in Mumbai. It will provide a fillip to new home construction in the segment.
Looking forward to a scenario where this can be extended to other cities in the state, as also positively considering the suggestion being made by consumer forums, about extending this to homes sized 750 sq ft.”
Developer, Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Treasurer, CREDAI-MCHI, commented, “The decision is likely to benefit prospective homebuyers, along with developers focussed on affordable housing. The up-to-500 sqft category of homes have seen larger demand from first-time buyers and millennials in the last few months and this move will further help sustain the demand. It will not only boost the affordable housing segment but will also help keep up the growth momentum, going forward”.
Bhushan Nemlekar, Director, Sumit Woods Limited said, “The move by the authorities is a welcome and a positive move for affordable housing. It will prove favourable for redevelopment and slum rehabilitation authority projects providing homes that are 500 sq ft or less in size. It will also enhance the acceptance of smaller size homes such as 1-BHKs and studio apartments, giving a much-needed fillip to the affordable housing segment.”
