Mumbai: The state government on Tuesday slashed the lease rent by half, giving relief to residents on government-leased property in Mumbai.
The annual rent will be 1 per cent of the 25 per cent of the ready-reckoner value, as against 2 per cent until now, according to the decision of the state cabinet. The lease-rent for industrial and commercial purposes also will drop.
The government claims that despite the reduction in the rent, the revenue will go up as many pending litigations on rent issues will get settled.
The lease rent policy for Mumbai, finalised on December 12, 2012, calculates the rent value on the 25 per cent amount of the ready-reckoner value. It was 2 per cent for residential property, 4 per cent for industrial purpose, 5 per cent for commercial purpose and 5 per cent for residential-commercial mixed use. Though the real estate rates have increased many times in the last few years, the occupants and owners are not getting much income out of it. So there was a demand to cut the lease rent and many had approached court demanding its reduction.
For a plot of less than 500 sqm used for the residential purpose for self-use and cooperative societies, the new rent lease will be calculated at the rate of 1 per cent of annual lease rent. For social and religious institutions like the orphanage, the rent will be charged at 0.5 per cent per annum. But the government has clarified that this relief will not be applicable to plots after redevelopment and lease rent will be charged as per the norms applicable.
