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    Premium to make collector’s land freehold for housing drops to 15% in Maharashtra

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    land freehold

    The Maharashtra cabinet has decided that the premium charged to convert collector’s land given for housing purposes to freehold land will be 15% of the Ready Reckoner rate, as against 50% proposed earlier.

    For conversion of leasehold land given for residential use, the premium will be 25% of the RR rate as against the 37% and 50% planned initially, taking into consideration the lease period.

    A senior bureaucrat said the premium for converting land given for commercial and industrial purposes would be 50%. The bureaucrat said that while the revenue department had in its proposal in November last year prepared rates across five categories, these have now been brought down to three in an attempt to simplify the procedure.

    Mumbai has 3,000 housing societies on collector’s land, with most of the foreshore land being given as leasehold. “Of 1,800 leasehold plots in Mumbai, 1,300 are in the island city, while the other 500 are in the suburbs,” the bureaucrat said.

    The state, where land is regulated under the Maharashtra Land Revenue Code, has 22,000 housing societies in all on collector’s land.

    Once collector’s land is made freehold, it would be free from the state government’s grip, and its full development potential could be exploited. It is, however, not mandatory to make collector’s land freehold as the provision is an enabling one, officials said.

    “The premiums will range from 15% to 50%. It was expected that once collector’s land becomes freehold, the government may earn a huge premium, but that prospect appears bleak now in view of the slowdown in the real estate sector,” the bureaucrat said.

    On November 17, 2018, the revenue department had published the draft rules for conversion of collector’s land.

    According to these rules, a 50% premium on RR value was proposed on what is officially termed as Class II land (for residential use, restricted use and transfer) and for land leased for a period up to 99 years, 37% on land leased for more than 99 years and currently held for the same lease period, and 25% on land granted as Class II or as leasehold to a cooperative housing society.

    Further, after expiry of three years from the date of publication of the gazette, for land held as Class II, the premium was to be 60%. For all other categories premium was to be 75%.

    The department received 500 objections and suggestions to its proposal. “We carefully studied these and have simplified the draft rules. Now conversion to freehold land will be simple and premiums too be will be less,” the bureaucrat said.

    Info- https://realty.economictimes.

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