Self-Redevelopment By Housing Society

Just before the onset of monsoons this year, the Maharashtra Housing and Area Development Authority (MHADA) identified more than 14,0      00 buildings in Mumbai as dilapidated structures, which needed to be redeveloped without further delay. While re-redevelopment is the way out for several old buildings in the city, it is not an easy task. Along with several complications, the biggest one is the most basic – picking a dependable builder. If you are wondering what self-redevelopment entails and its pros and cons, allow us to help you. “Self-redevelopment does not only provide the assurance of time-bound, cost-controlled and predictable results, but also brings down the cost of surplus apartments as opposed to the prices of flats being inflated when a developer is involved, since his sole objective is hefty profit margins. In other words, housing societies, which self-redevelop their premises can sell the resulting extra flats at lower and more competitive rates,” adds Shobhit Agarwal, MD and CEO – ANAROCK Capital.

“Also, with the permissible FSI as per the development control rules, additional FSI of 10 per cent is also granted to societies opting for self-redevelopment,” says Anuj Puri, chairman – ANAROCK Property Consultants. “Further, these societies will be able to avail government’s subsidy of up to four per cent on loans taken during the transfer of development rights (TDR) which can be made available to societies at 50 per cent of the rate. As per the latest government resolution, there will also be added concessions in stamp duty and taxes. For instance, if the society completes a project within the fixed timeline, they can be discounted from LUC tax – Land Under Construction assessment tax,” informs Puri. “However, do keep in mind that in self-redevelopment, the office bearers of the housing society, as well as the members, are donning the ‘developer’s cap’. Thus, in case of any delay, they are liable to pay the fine.” adds Niranjan Hiranandani, national president, NAREDCO. “The absence of a concrete policy on self-redevelopment may also make people dodgy about opting for it. Also, it is likely that small societies would opt for self-redevelopment as it would be difficult to get approvals from all residents in a healthy society,” says Samantak Das, chief economist and head of research & REIS, JLL India.

Source: Times Property, Saturday 1 February 2020

Pre-fabricated facts in check

Prefabricated homes can potentially reduce construction timelines by 30-50 percent and eventually bring down cost of ownership. Read on to know how mass implementation of these technologies can help meet the ambitious target, as espoused by the ‘Housing for All’ mission. A developing nation in every sense of the term, our cities today are witnessing heavy-duty development and construction projects of varying scales and sizes. Whether it is a 100-acre IT park in Bengaluru or the 200-km Mumbai Metro linkage system, with all that fast-paced construction going on around us, it is easy to miss the engineering marvel called prefabricated construction where individual humongous slabs of concrete are assembled together using high-power precision cranes. Compare this with the tedious and traditional method of manual brick-and-mortar layering and the efficiency gains in terms of time and money become all too apparent. Hence, construction of a 15-storey residential project, which would normally take nearly two years, can now be achieved in less than 15 months, thus saving a pretty penny for developers and home-owners in the form of pre-EMIs.

Tech-it up: The Ministry of Housing and Urban Affairs (MoHUA) of the Government of India had announced the Global Housing Construction Technology Challenge as a part of the technology sub-mission of PMAY-U to foster housing construction in urban areas. Through this challenge, the MoHUA is inviting ideas for innovations in delivering mass housing more sustainably, cheaply, and quickly. Many experts predict that the only way to build at the speed required by this ambitious target is by wholesale adoption of emerging technologies such as prefab and precast, which allow developers to build homes in less than half the time of conventional brick and concrete.

Need for Speed: In 2015, PM Narendra Modi announced the ambitious mission of ‘Housing for All by 2022’ with a target of building 50 million homes across the country. With less than 15 per cent of that target achieved four years hence, the real estate industry is still struggling to meet the needs of home-seekers in both, rural and urban areas. Explaining this conundrum, a senior official from Knight Frank India, says, “There is a clutch of factors that the industry needs in order to deliver the target of Housing for All by 2022. Among other things, the key are favourable financial conditions for suppliers and buyers, policy issues, critical infrastructure and other related urbanisation incentives, use of advanced technologies, etc. For achieving this target within the stipulated time, new technologies like precast/prefab will result in speedy work, better finishes and structural strength.”

Source: Times Property, Saturday 1 February 2020

BMC to bring In Transparent Property Tax Rules soon

The Brihanmumbai Municipal Corporation (BMC) has set up a committee to reform the norms under which property taxes are charged. The BMC officials said the new rules will be to ensure maximum recovery of bills from citizens, unlike the current system where the outstanding amount increases every year. The civic body is aiming to make the new reforms more citizen-friendly, as the current taxable system is under litigation for years and the BMC hasn’t been able to recover the money. Currently, dues worth R15,000 crore are outstanding and about 70 per cent of this amount is pending, following the Capital Value system. According to officials, BMC’s property tax collection rules change every five years. But, since the last decade, the property tax is being challenged owing to various reasons such as — houses below 500 square feet were charged differently earlier, while some claimed that use of Capital Value System was wrong which saw citizens approaching the court.

While there is no clarity on increase in property tax amount in the 2020-2021 budget, BMC commissioner Praveen Pardeshi said the forthcoming slabs of 2020-21 to 2025-26, will have reformed property tax rules. Currently, the reforms are being drafted and the new rules will be presented to the committee for approval before being implemented. “The committee is still working on the reforms and studying the loopholes in the past rules. The aim is to avoid any repetition of previous experiences which were challenged in court. There is a discrepancy in collecting the taxes, which we are trying to abolish and streamline,” a civic official requesting anonymity said.

Source: Mid-Day, Thursday 6 February 2020

 


View Spacio’s Newsletter Archive

WE’RE HERE TO HELP

Connect with one of our experts. We look forward to helping you with your real estate needs.

Request a Call Back