Maharashtra Govt. Waives Interest on Premium for Self-Redevelopment Projects Until March 2026

Maharashtra Chief Minister Devendra Fadnavis has announced a waiver on the interest charged for premium payments in self-redevelopment projects across the state. This policy, effective until March 2026, aims to ease financial pressure on housing societies choosing to redevelop their buildings independently. The announcement was made in Charkop during a key distribution event for a completed self-redevelopment project.

Self-redevelopment enables housing societies to reconstruct their buildings without involving private developers. In such cases, societies arrange financing and manage the construction process themselves. The Maharashtra government typically charges a premium of 5% of the ready reckoner value for self-redevelopment on government-owned leased lands. Societies are allowed to pay this premium over three years but were previously required to pay an additional 8.5% interest on the total amount.

By waiving this interest, the state aims to make self-redevelopment more accessible, particularly in cities like Mumbai, where many societies struggle with financial constraints. Redevelopment projects require significant funding, often through bank loans, and societies have had to bear the cost of both loan interest and government-imposed charges. Eliminating the interest on premium payments is expected to reduce these costs and encourage more societies to take up self-redevelopment.

Fadnavis acknowledged the challenges societies face when managing redevelopment. He pointed out that the requirement to pay interest on both bank loans and government premiums added a financial strain. The waiver will help societies navigate these costs more effectively and complete their projects without excessive financial burden.

The exemption applies to all self-redevelopment projects approved within the specified period. However, Fadnavis clarified that the waiver would not be extended indefinitely. He cautioned that an extended exemption could lead to delays in execution, similar to issues seen in builder-led redevelopment projects. The government will assess the impact of this measure and decide on any further extensions based on the response from housing societies.

This move is expected to accelerate self-redevelopment projects, particularly in Mumbai, where aging buildings and space constraints make redevelopment a pressing need. Unlike traditional redevelopment led by builders, self-redevelopment gives housing societies complete control over their projects, ensuring cost efficiency and timely execution.

By removing the interest burden on premium payments, the Maharashtra government aims to encourage societies to take up self-redevelopment as a viable alternative. The policy provides immediate financial relief and promotes a more independent approach to urban renewal. 

Image source- facebook.com