Gujarat Allows Agricultural Land for Affordable Housing

Even as the real estate developers are battling the Covid-19 induced demand slowdown, the realty sector received a booster dose with Gujarat chief minister Vijay Rupani allowing real estate developers to purchase agricultural land for affordable housing under Section 63AAA of the Gujarat Tenancy Act. The section allows purchase of agricultural land for bona fide industrial purpose. “To ensure availability of land for affordable housing and provide more affordable homes to the people, the state government will permit purchase of agricultural land for affordable housing under the Section 63AAA,” Rupani said. “With this, a developer will be able to buy agricultural land in the name of his company and the process to convert land into non-agricultural land can be initiated after the acquisition. This will reduce overall project cost and ensure faster execution of realty projects,” said Ashish Patel, president, CREDAI-Gujarat. The state government will also provide interest relief on payment of chargeable FSI (floor price index). The developers have to pay charges for additional FSI above the permissible base FSI. An interest is charged if the amount is paid in instalments. The chief minister also announced raising the carpet area limit for affordable housing units from current 80 square metre to 90 square metre. The state government is also considering the demand of real estate developers that the premium on new tenure land be levied only after the mandatory deduction of land in non-town planning (non-TP) areas.