Cabinet will give final approval to the leasehold property conversion concession

In its most recent cabinet meeting, the Maha Vikas Aghadi (MVA) government extended the concessional rate of 15-25% of premium charges on leasehold property conversion to freehold. Following that, on July 5, a government gazette was issued, extending the deadline for submitting suggestions and objections until August 4. The newly formed government of Eknath Shinde and Devendra Fadnavis will now give it final approval.

 

Salil Rameshchandra, President of the Federation of Grantees of Government Lands, stated that the concessional scheme expired on March 7, this year and that they had requested an extension. He expressed confidence that the new government will not obstruct this extension, noting that the previous benefit of a discount was also provided during the BJP-Sena coalition government.

The federation has urged the government to reduce the concessional rate to 5%, as it did with Nazul land.

 

"Many cooperative housing societies on leasehold land cannot even pay the concessional 15-25% premiums charges on ready reckoner rate, which is also high," Rameshchandra said. The tenants are mostly senior citizens with middle-class incomes. If one looks at the numbers, the conversion fees reach crores of rupees, which is unaffordable. We will present the government with our 5% leasehold property conversion demand."

 

According to the extended draught gazette notification issued on July 5, cooperative housing societies will have to pay 15%, non-cooperatives 25%, and commercial or individual lease owners 50% of premium charges on ready reckoner rate of conversion to freehold land from leasehold land.

 

Housing societies on collector land across Maharashtra petitioned the state in 2014 to convert Class II Collector Land (leasehold) to Class I Collector Land (freehold). The demand was made to allow owners of housing, commercial, and industrial leasehold land to freely redevelop the land without having to seek government permission for each redevelopment. The land was sold on an occupancy basis, which meant that individual buyers received ownership. In 2016, the government issued an order allowing conversions by paying ready reckoner premiums. 

Residential land premiums were lower, while commercial and industrial land premiums were higher. Conversion fees were raised to 50% of ready reckoner rates in September 2018. This received a lukewarm response.

 

 

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