MUMBAI: The BMC has amended its Vacant Land Tenancy (VLT) policy, now allowing plots smaller than 125 square meters to be converted into leasehold properties for a period of 30 years. The updated policy is a significant shift from the last amendment of March 2020, which only allowed larger plots to be leased. It is expected to boost the BMC’s revenue from these lands and create more development opportunities for lessees.
Currently, there are 3,472 VLT plots, large and small, in Mumbai, many located in high-demand areas like Dadar, Matunga and other parts of the island city and western suburbs. Of these, only 610 plots have the potential to be converted under the new VLT policy. Despite this limitation, the potential value of these 610 plots is substantial, estimated at over ₹2,000 crore. The BMC budget document, tabled on February 4, too had stated that the civic body aimed to earn a revenue of about ₹2,000 crore in the form of a One-Time Premium in the coming four years.
The tenants of VLT plots currently pay a nominal rent, sometimes as little as ₹30 to ₹100 per month. Under the amended policy, the premium charged by the BMC will be based on the plot’s land value, calculated using the ready reckoner rate multiplied by the zonal Floor Space Index (FSI). In the island city, this translates to an FSI of 1.33.
Once the land is converted into a leasehold property, the lessee can explore the full potential of the plot, including redevelopment, subject to approval from the BMC’s building proposals department. According to a civic official from the BMC’s estate department, the BMC will charge a premium of 62.5% of the land’s value for conversion to leasehold.
{{/usCountry}}Once the land is converted into a leasehold property, the lessee can explore the full potential of the plot, including redevelopment, subject to approval from the BMC’s building proposals department. According to a civic official from the BMC’s estate department, the BMC will charge a premium of 62.5% of the land’s value for conversion to leasehold.
{{/usCountry}}The VLT Policy was formulated decades ago to address vacant BMC lands. Historically, these plots were leased out on a tenancy basis to various individuals, with minimal overseeing and at very low rental rates. Over the years, some of them were encroached or developed without the BMC’s permission, leading to a complicated situation where many plots were no longer technically “vacant”.
The BMC currently receives a total of ₹3.5 lakh annually from rent paid by lessees. Once converted to leasehold properties, the BMC will have more control over these lands and can derive greater income from them.
The revised VLT Policy could also have positive implications for Mumbai’s broader urban planning efforts. By converting the VLT plots into leasehold properties, the BMC will be able to implement its Development Plan (DP) more effectively, said the civic official. It will also make it easier to reclaim and repurpose land currently occupied by unauthorised constructions or slums which are reserved in the DP as playgrounds, recreation grounds and other open spaces.
Stay updated with all the Breaking News and Latest News from Mumbai. Click here for comprehensive coverage of top Cities including Bengaluru, Delhi, Hyderabad, and more across India along with Stay informed on the latest happenings in World News.
Stay updated with all the Breaking News and Latest News from Mumbai. Click here for comprehensive coverage of top Cities including Bengaluru, Delhi, Hyderabad, and more across India along with Stay informed on the latest happenings in World News.