Premium on FSI may be Dropped in Mumbai, Real Estate Industry to Benefit

By : 360 Realtors

16 July, 2018

The real estate industry in Mumbai is likely to get a boost, as Brihanmumbai Municipal Corporation (BMC) has proposed to bring out a policy paper, that will re-examine the premium for charges for releasing the additional floor space index (FSI) in the real estate sector. This move will give a much-needed boost to the real estate sector. More projects are likely to come up in the coming months. In case you are interested in the luxury housing projects in india, you can have a look at the leading real estate websites. A reduction in the premium may trigger the launch of more real estate projects. Presently, a number of projects are stuck, due to the high construction cost in Greater Mumbai. According to the ready-reckoner (RR) rates the premium on FSI is 60%, 80% and 100% of the stamp duty for residential, industrial and commercial real estate, respectively. The move is likely to strengthen the real estate industry in Mumbai, as more projects are likely to come up in the years to come.

At present, an annual premium of INR 8,000 crore is collected from the construction projects in the city. The city gets INR 5,000 crore as share, while the balance goes to the state government. FSI refers to the ration of the total built-up area to that of the plot size. According to Ajoy Mehta, BMC chief, the present premium rates need to be re-examined. The authorities need to decide the right level of premiums. The funds that are mobilized will be used to finance various projects on infrastructure. However, it is necessary to have the right price level. They need to come up with a policy paper in order to achieve this goal.

At present, it is necessary to rationalize the premium charges, which are currently astronomical. The premiums in Mumbai account for 35% to 40% of the project costs. These are linked to the ready corner rates and therefore, they keep on increasing every year. In case you are willing to buy luxury property in the city, you can contact the luxury property agents. They will help you in choosing the right property.

Experts are of the opinion, that in down market situations, like now, certain discounts may be offered by the authorities to a few sectors. These include the commercial offices and the affordable housing sector. This will make the system more robust and friendly to the market. Re-evaluating the rates of premium can bring the much-needed relief to the sector. Besides, the developers will get a deferred payment facility. This can bring down the costs of development to a large extent and in turn, benefit the homebuyers. In case you are planning to buy luxury real estate in India, you can have a look at the ongoing projects and make your purchase. Mumbai is one of the most important residential hubs if the country. The changes in policies can boost up the real estate business in the city. You can have a look at the leading real estate portals and get a property that suits your needs.