Maharashtra Government Extends Land Tenure Conversion Deadline to December 2026, Offering Major Relief to Mumbai Housing Societies

In a significant move aimed at supporting housing societies and accelerating redevelopment across Mumbai, the Maharashtra government has reportedly extended the deadline for Class 2 to Class 1 land tenure conversion until December 31, 2026. According to industry sources, this extension is expected to provide thousands of cooperative housing societies with additional time to secure full ownership rights and unlock long-pending development projects.

Understanding the Difference Between Class 1 and Class 2 Land

Industry experts indicate that understanding the distinction between freehold and leasehold property is crucial for homeowners and investors. Class 1 land, commonly referred to as freehold land, can reportedly be sold, mortgaged, or inherited freely without requiring government permission. In contrast, Class 2 land operates under leasehold conditions, where ownership restrictions apply, and government approval is mandatory for any transfer or redevelopment activity.

Revised Premium Rates for Land Conversion

According to the latest announcements, the government has established revised premium rates linked to the ready reckoner rates in Maharashtra. Private entities seeking land conversion will reportedly be required to pay 10% of the ready reckoner rate as premium, while housing societies undertaking self-redevelopment will benefit from a reduced rate of just 5% of the ready reckoner value. This policy aligns with the earlier announcement where Mumbai leasehold societies could convert to freehold at concessional rates.

The move is expected to directly benefit thousands of cooperative societies sitting on leasehold lands who previously struggled with complex approvals and restrictions that reportedly stalled redevelopment efforts for years.

Four Major Housing Sector Reforms Announced

Revenue Minister Chandrashekar Bawankule reportedly laid out four major initiatives in both Houses of the state legislature, receiving support from across party lines. These reforms are being viewed as transformative measures for Mumbai's redevelopment drive amid urban challenges.

1. Extended Conversion Deadline

Housing societies have reportedly been granted time until the end of 2026 to convert their land tenure from Class 2 to Class 1, providing much-needed breathing room for administrative procedures and financial planning.

2. FSI Flexibility Under PMAY

In a move expected to significantly impact societies considering self-redevelopment, the government has reportedly removed the mandatory 25% reservation for economically weaker sections (EWS) under increased FSI provisions of the Pradhan Mantri Awas Yojana for societies opting for self-redevelopment. Industry sources indicate that this reservation requirement was previously seen as a significant barrier by many societies, and its removal could potentially unlock thousands of long-pending projects. This development comes as Maharashtra has already delivered 30 lakh homes under PMAY.

3. Long-Term Lease Rent Rationalisation

According to the announcement, significant changes have been introduced for properties on long-term leases. For leases of 90, 99, or 999 years on state-owned land, rents will reportedly now be recalculated at 25% of the official land valuation based on ready reckoner rates in Mumbai, in cases where periodic revision is contractually required. Additionally, if the property is currently under a cooperative housing society, the government will reportedly collect unearned income before lease renewal in the society's name.

4. Facilitating Ownership Transfers

The reforms are reportedly designed to make it easier for societies to gain full ownership rights, enabling smoother mortgage, redevelopment, and resale processes. This initiative complements the online deemed conveyance system launched for 70,000+ housing societies in Maharashtra.

Chief Minister Baliraja Farm Road Scheme for Rural Development

In addition to urban reforms, the state has reportedly also launched the Chief Minister Baliraja Farm/Access Road Scheme, aimed at strengthening rural infrastructure. The scheme is expected to focus on building year-round, all-weather roads for farmers, removing encroachments on cadastral (land record) roads, and waiving charges on land measurement, police deployment, and royalties on mud, silt, gravel, and stone.

According to government sources, the scheme will be machine-driven to align with India's agricultural mechanisation push and will be supervised by constituency-level MLA-led committees. This rural initiative mirrors the state's broader development agenda outlined in the new housing policy targeting 3.5 million affordable homes by 2030.

Industry Impact and Future Outlook

The latest measures reportedly mark a strong policy shift by the Maharashtra government to address key challenges in Mumbai's real estate redevelopment while simultaneously promoting rural connectivity. By extending the land tenure conversion deadline and simplifying FSI and lease rent rules, thousands of cooperative housing societies in Mumbai are expected to have a clearer path to ownership, redevelopment, and safer living conditions.

Industry analysts suggest that these reforms, combined with the PMAY extension boosting the affordable housing sector, could potentially transform Mumbai's urban landscape over the coming years. The rural road initiative is simultaneously expected to strengthen agriculture infrastructure, making both urban and rural communities the focus of the state's comprehensive development agenda.

Disclaimer: This news article is intended for informational purposes only. The information presented is based on reports and announcements from government sources. Readers are advised to verify details from official government notifications before making any property-related decisions. Ghar.tv does not take responsibility for any decisions made based on this information. For accurate and updated policy details, please consult the relevant government authorities or seek professional legal advice.