While redevelopment and new launches are gaining pace in Mumbai, with the city’s civic body reducing premiums by half amid the pandemic, the trend of purchasing bigger apartments or those with amenities such as more open space and a balcony is also picking up.
This has also resulted in developers marketing 'Jodi apartments' in upcoming or ongoing construction. 'Jodi apartments' are a combination of two or more units into one unit.
The Jodi apartment concept is not new, with developers and real estate brokers using the term to sell apartments for decades now. However, with the trend of upgrading apartments catching on since the pandemic began, 'Jodi flats available' is being advertised across Mumbai, Thane and Navi Mumbai.
What is a Jodi apartment?
A Jodi apartment allows buyers to amalgamate two or more flats. For example, homebuyers may purchase a 1 BHK and a 2 BHK instead of a 3 BHK. Or even two 2 BHKs instead of a 4 BHK.
This allows home buyers to have two living rooms and extra bedrooms, with the kitchen in one of the apartments converted into a bedroom.
Why home-buyers want Jodi apartments
Arun Sharma, AVP Sales and Marketing, Viceroy Properties, which is constructing a residential project in Kandivali comprising 2 and 3 BHKs, says people buy a combination of more than one apartment for various reasons.
"The basic premise behind considering a combination apartment by the buyer is the flexibility for the buyer to expand his own space in case of a larger family living together, and greater convenience with enhanced individual privacy. Therefore, buyers considering a combination flat are definitely upgrading from their existing living standard to address the above underlying needs."
Sharma adds, "We are offering a combination of 2 BHK+2 BHK, 2 BHK+3 BHK and 3BHK + 3 BHK as per the buyer’s choice, ranging in the area of 1,500 sq ft to 2,200 sq ft. The family size of the buyers ranges from nuclear family to joint and even large families, and the buyers are in the age group of 30 to 55 years of age. This includes professionals, entrepreneurs etc being in an income group of above Rs 75 lakh per annum."
'Not due to the pandemic'
"I would not say that Jodi apartments as a trend is picking up since the COVID-19 pandemic began. It has always been there. The practice is to combine more than one apartment into one large apartment, and this is because there is a demand for large flats in the micro market of Bandra, Khar and Santacruz, where we are operating," says Ram Raheja, director, S Raheja Realty.
He adds, "Our planning has been flexible and by nature it becomes very easy to make a jodi apartment. The buyers are both nuclear and joint families as they want to be next to each other, and yet away. The reason for buying is simple. Instead of, for example, a father purchasing one flat of 4 BHK for his two sons, he will buy two flats of 2 BHK as a jodi apartment, and give one to each of his sons. It is also about family planning, financial planning for individuals who want to stay nearby. We are quoting a rate of over Rs 85,000 per square feet in one of our projects in Khar, where we have sold Jodi apartments."
Is there a tax benefit in buying a Jodi apartment?
According to experts, there is no significant benefit as such if a tax-paying citizen opts to buy a Jodi apartment. However, a buyer can claim benefits under section 54 of the Income Tax Act. To claim an exemption under section 54, a taxpayer should purchase a residential house one year before or two years after the date of transfer of an old house, or construct a house within three years from the date of transfer.
Aditya Zantye, a Chartered Accountant (CA), says, "It is often seen that Jodi flats attract buyers due to significant investment-linked tax benefits. As per various judgements of appellate authorities, multiple adjacent flats can be considered as a single residential unit or a residential house for the purpose of claiming benefit under section 54 of the Income Tax Act, 1961."
"Moreover, The Finance Act, 2019, introduced a provision to section 54(1) wherein the benefit of rollover of capital gains was increased from investment in one residential house to two residential houses for those having capital gain up to Rs 2 crore. However, the benefit can be claimed only once in a lifetime," adds Zantye
Is permission required to merge two flats?
Homeowners do not require any specific permission from the Brihanmumbai Municipal Corporation (BMC) to merge flats, and, according to the latest development control regulations (DCR), internal changes in a flat or a commercial establishment can be conducted after submitting relevant certificates from the structural auditor and architect stating that changes in the flat will not affect the original structural strength of the entire building.
According to architects and developers Moneycontrol spoke to, there is no fixed size for two apartments being merged. However, the general combination is a 1 BHK with a 2 BHK, or two 2 BHKs, or a 2 BHK with a 3 BHK.
However, though the two flats are merged, property tax etc will be charged by the authorities on both apartments, depending on the size of the apartments.
"In simple words, merging of two flats is possible and it is legally permissible. However, who needs to go and seek permission from the BMC depending on project to project. In case, it is a new project and the homebuyer is going to move into a jodi apartment, the homebuyer should ask the developer to take all the permissions," says Vilas Nagalkar, an architect based in Mumbai.
He adds, "If it is an old society, the homeowner will require a no objection certificate (NOC) from the housing society. If the society is not formed, an NOC might be required from the developer. Additionally, a certificate from the structural auditor that the merging of two or more flats will not affect the structural stability of the building is needed."
While merging two flats means partially breaking a wall between the two flats, developers and architects say there is a concept of a soft wall these days. Under the soft wall concept, the developer decides the configuration of the material being used for the wall by keeping in mind the possibility of merging the two flats.
"We are constructing two towers in Mazgaon, where we have an inventory of 387 flats, by redeveloping the land belonging to Prince Aly Khan Hospital," says Vipin Mittal, CEO, projects, Aga Khan Agency for Habitat India, which is part of the Aga Khan Foundation. "We are in the pre-launch stage, where we already have around 70 bookings. In this, there are a lot of enquiries for Jodi apartments, where we are offering two apartments of 2 BHK. Bigger families or people looking for upgrades are the ones who buy Jodi apartments."
Mittal adds, "For this to happen, the common wall between the two apartments should be masonry (a soft wall) instead of RCC. This can be easily broken to merge the two flats. While combining the two apartments one must ensure that there is no damage or alteration to the structural elements. Also, the location of wet areas (kitchen and toilets) should be retained. If a buyer approaches the developer during the construction stage, the developer will get it regularised from the MCGM. If the buyer does it at a later stage, he can get it regularised on his own."
No market for smaller apartments?
Since the pandemic began, construction of bigger apartments or spacious apartments has been picking up pace. However, there are many who believe that smaller apartments will continue to sell, considering the availability and affordability in the market. This is because many people want to have a house of their own rather than renting one, and a small one is all they can afford.
There is a trend of bigger houses or customers coming in with queries for Jodi apartments as some consumer segments are now buying spacious houses," says Mamik Jain, Director at Promesa Realty, a venture of Darsshan Properties. "Parallelly, we are noticing a strong sentiment to own a house, irrespective of the size. This is the reason we are tapping the scarce but lucrative market of affordable homes by selling under the ₹55 lakh bracket in the heart of the city, near Bandra Kurla Complex."
He adds, "We are constructing 288 units of 1 BHK measuring around 230 sq ft and the rate we are quoting is around ₹22,000 per sq. ft. This is probably the most affordable home in the area and also in the whole city up to a certain extent."
"Today, while there are spacious apartments or those where the option of Jodi apartments is available, there are also buyers who have a budget as low as ₹50 lakh. Hence, after extensive research by our team, we have decided to sell homes as small as 230 sq ft as we want to cater to those buyers not being catered to by other players, and this is what makes us confident about investing in smaller apartments. I do not see any competition to this size at the moment."
