Maharashtra Chief Minister Devendra Fadnavis has announced a waiver on the interest charged for premium payments on self-redevelopment projects across the state. This decision, applicable until March 2026, is aimed at reducing the financial burden on housing societies opting for self-redevelopment. The announcement was made at an event in Charkop, where the Chief Minister distributed keys to homeowners of a completed self-redevelopment project.
Self-redevelopment allows housing societies to reconstruct their buildings without involving private developers. In such projects, societies secure financing and oversee the construction process themselves. The Maharashtra government levies a premium of 5% of the ready reckoner value on housing societies undertaking self-redevelopment on government-owned leased land. Societies are permitted to pay this premium over a three-year period, but they were previously required to pay an additional 8.5% interest on the total amount.
The waiver of this interest is expected to encourage more housing societies, particularly in Mumbai and other urban centers, to consider self-redevelopment. Many societies face financial constraints when opting for redevelopment, as they must take loans from banks while also managing government-imposed financial obligations. The removal of interest on premium payments reduces one of these financial burdens, making self-redevelopment a more viable option.
During his announcement, Fadnavis acknowledged the financial strain caused by dual interest payments. Housing societies undertaking self-redevelopment typically secure loans from banks for construction, and in addition to repaying the loan with interest, they were also required to pay interest on the government’s premium. By waiving this interest for three years, the government aims to support societies in completing their projects without excessive financial pressure.
The waiver applies to all self-redevelopment projects approved within this timeframe. However, Fadnavis emphasized that the exemption will not be extended indefinitely. He pointed out that a prolonged waiver period could lead to unnecessary delays, similar to those often seen in builder-led redevelopment projects. The government will monitor the impact of the policy and assess whether further measures are needed after March 2026.
The decision is expected to accelerate the pace of self-redevelopment projects in Maharashtra, particularly in Mumbai, where redevelopment is a critical concern due to aging buildings and limited land availability. Self-redevelopment offers an alternative to traditional builder-led redevelopment, allowing housing societies to retain full control over their properties, manage costs more efficiently, and ensure timely project completion.
With this initiative, the Maharashtra government aims to make self-redevelopment a more attractive and financially feasible option for housing societies. The waiver of interest on premium payments provides immediate financial relief while also promoting a more independent approach to urban renewal. The government’s decision is likely to be welcomed by housing societies considering redevelopment, as it removes a significant cost barrier and encourages faster project execution.
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