Investing in a property, without sufficient knowledge or access to researched information, can be tricky, to say the least. The world of real estate is complex, with lengthy processes, complicated rules, regulations, and a multitude of paperwork. Investing in a property requires a significant amount of money and so it is advisable to get yourself acquainted with some concepts, terms, legalities, and abbreviations used in this sector. One such important term is Floor Space Index (FSI).
Floor space index is the maximum permissible floor area that a builder can build on a particular plot or piece of land. To understand this in simpler terms, FSI is the ratio of building floor-covered area to the total area available on the land. Floor Space Index is also known as the Floor Area Ratio (FAR). The FSI can be calculated using the following formula:
Floor space covered on all floors / Total area of the plot
FSI × Plot Area = Built-up Area
Example 1: A simple example of this would be if a plot of land measures about 500 square meters, and the permissible FSI according to your district/state is 1, then
PLOT OF LAND = 500 square meters
FSI = 1
Total area that can be built = 500 X 1 = 500 square metre.
The construction of 500 square meters will be allowed on this plot.
Assume I have a land of 2000 square feet, and I want to construct a building on it. The FSI for that region is 1.5
Again, FSI x plot Area = Total Built-up Area which is 2000 x 1.5 = 3,000 square feet.
Now the building can be 3 floors of 1000 square feet each, 2 floors of 1500 square feet each, or 1 floor of 3000 square feet.
Every state within India calculates FSI differently. In fact, FSI calculations can differ from city to city within a state as well. Factors such as the location of the plot, the surrounding infrastructure, population density, growth models, development plans, etc. influence the total FSI granted for a particular plot of land. For instance, FSI granted in old and established parts of a city may be different from the FSI granted in developing areas of the same city. Sometimes governments may increase FSI in certain areas to encourage and foster development.
FSI in Maharashtra
FSI has been in the news lately because of the redevelopment projects taking place in Maharashtra, specifically Mumbai. Now in suburbs, private buildings will get 2.7 FSI including fungible, and in cess buildings and slums FSI of 4.05 including fungible will be available. In the year 2019, in a bid to boost the real estate market, the government of Maharashtra announced a reduction in the premium on additional FSI (floor space index) and fungible FSI, among other measures. However, this was available for only 2 years, and for projects that were going to be launched, and not the ones that were sold.
What is Fungible FSI?
If a developer wants to construct anything beyond the permissible FSI limit given by the authorities and increase the built-up area, he will have to purchase that additional piece of land space from the city authorities. This additional space purchased from the authorities is referred to as fungible FSI. It is also called Premium FSI. The premium that one must pay for extra land varies due to a lot of factors and is changed by the DCR according to the market. The premium levied is calculated as a certain percentage of the Ready-Reckoner-Rate (RRR) of the plot.
The concept of ‘Fungible FSI’ was amended in the new Development Control Regulations (DCR) in 2012. As per the new DCR rules, balconies, stairs, flower beds, and corners are calculated in FSI. The builder cannot use extra space in apartments to create them. However, to compensate for this, the Government has allowed an additional 35% Fungible FSI for residential properties and 20% Fungible FSI for industrial & commercial properties.
How does FSI affect my purchase?
Although the math may seem simple, calculating the actual Floor Space Index of a potential building can be a tedious task as many areas such as basements, porches, shafts, lifts, service areas, etc. may or may not be taken into consideration. For example, in Mumbai, the basement parking area does not count as a part of FSI, but some other cities might include it while calculating the index. Similarly, rules may be different in another state.
If a builder flouts the FSI norms by exceeding the area of development, the project may not receive a final occupancy certificate making it illegal for flat owners to occupy the flat. Without an OC, a society cannot apply for basic services such as water and electricity. Therefore, as a home buyer, it is important that you be aware of the FSI granted and used by the builder. You can find this information on the MahaRERA website by searching for the project using its RERA number or on the Propscience website, under the project details section of any project.
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