November 20, 2025: The Maharashtra government has introduced an extensive package of incentives aimed at boosting rental housing development across the Mumbai Metropolitan Region (MMR). The initiative, anchored by the Maharashtra Housing Area Development Authority (Mhada), includes significant tax waivers, reduced development costs, and additional construction rights—measures designed to attract developers and address the region’s growing housing demand.
Under the draft rental housing policy, developers will benefit from a 10-year complete waiver of income tax on rental income, a five-year property tax exemption, and a concession in GST. Mhada has also proposed free additional floor space index (FSI)—0.5 in Mumbai and 0.3 elsewhere in MMR. During a presentation to developers, Mhada vice-president Sanjeev Jaiswal invited industry suggestions to refine the policy and confirmed that Mhada is the nodal agency for its implementation.
Jaiswal outlined further incentives, including a 50% reduction in development charges, with the local body’s share proposed to be returned to the housing society as a maintenance corpus. To ensure effective upkeep of rental units, the draft calls for full property tax exemption for five years, followed by a 50% levy for the next five. It additionally proposes waivers on stamp duty and GST, along with capping lending interest from financial institutions at 6%.
The policy encourages public-private partnerships, hybrid development models, and long-term government land leases. Developers will also have the option to exit projects by selling tenements to occupants or in the open market. Jaiswal noted that Mhada has drafted both the Rental Act and accompanying rules, which will soon be presented to the chief minister and housing minister before moving to the legislature.
Highlighting the need for rental housing, Jaiswal said 21 lakh homes across Maharashtra remain unoccupied, 44% of them in MMR, while Mhada and Cidco hold substantial unsold inventory. He emphasised that rental housing is intended for migrants, students, labourers, working women, tourists, disaster-affected and project-affected persons, the homeless, and economically weaker sections, describing it as “a viable alternative to slums.” He added that the goal is to initially provide rental housing and eventually convert units into ownership.
Jaiswal flagged dispute resolution delays as a core challenge. “Around 67% of cases dragged beyond 5 years and only 10% of cases resolved within 2 years,” he said, stressing that prolonged litigation undermines rental market trust. A dedicated rental housing portal is also proposed to improve transparency and access.
The state aims to create 30 lakh homes in MMR by 2030, with Mhada responsible for 8 lakh—including rental stock. The cabinet has additionally approved a cluster redevelopment policy for all Mhada layouts over 20 acres, requiring consent only from housing societies, simplifying redevelopment procedures.
Source: The Times of India
