Mumbai: In a relief to cooperative housing societies and bungalows built on government lands leased for fixed terms, the State Cabinet on Tuesday reduced the lease rent by 1%. The decision will impact around 300 housing societies and bungalows with plot area less than 500 square metres.
The government in its decision on December 12, 2012, had revised the lease rent of lands, linking them to the ready reckoner rates. The move had fetched more revenues to the treasury. However, the decision faced legal obstacles as petitions were filed claiming the increase in lease rent was too high.
The lands given on lease include those allotted to gymkhanas (most of them in south Mumbai), educational institutes, hospitals, religious trusts, charitable institutions, housing societies, and business houses. These lands were given on paltry amount on lease for years ranging from 50 to 99 or even more. Tuesday’s decision will affect only the housing societies and charitable trusts.
As per the 2012 decision, the residential housing societies and charitable trusts were to pay 2% of the 25% of the market value of the plot as the lease rent. For the industrial and commercial establishments, the lease rent was 3% and 5%.
On Tuesday, the Cabinet amended the earlier decision by reducing the 2% to 1% of the 25% of market value of the plot of the residential housing societies and bungalows with area less than 500 square metres. However, the same will not be applicable if the housing society undergoes redevelopment. At the same time, repair or maintenance will not be considered as the redevelopment of the building.
For charitable institutions, which are religious places, orphanage, social and cultural centres and homes for the needy, the amount has been reduced to 0.5%, instead of 2%. For the rest, the amount remains the same as decided in 2012.
“Yes, there are cases in court and no verdict has been given. However, the government thought it was necessary to address the concerns,” an officer from the revenue department said.
The government has leased around 1,300 plots in the city and 400 in suburbs. “This concession will be applicable at the time of renewal of the lease. The lease rent gets revised every five years,” the officer said.
In February 2018, Revenue Minister Chandrakant Patil had announced that the State will ensure that the lease rent would be reduced following his meeting with representatives of housing societies.
