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HindustanTimes Thu,21 Aug 2014

Deemed conveyance relief for old housing societies

HT Correspondent, Hindustan Times  Mumbai, July 18, 2013
First Published: 02:17 IST(18/7/2013) | Last Updated: 02:19 IST(18/7/2013)

In a significant decision, the state government announced on Wednesday that it will not ask old housing societies to pay stamp duty at existing ready reckoner rates while applying for deemed conveyance.

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Minister of state for housing Sachin Ahir made the announcement in the assembly in reply to a calling attention notice by NCP's Jeetendra Awhad. Ahir said the state is mulling an amnesty scheme in which the old societies will pay stamp duty at rates that prevailed at the time of flat purchase. "We are also making a provision in which the old societies will not be asked to pay stamp duty for unsold flats," said Ahir.

However, the minister refused to grant deemed conveyance to societies comprising illegal buildings, though he assured that the ownership of the land will not be allowed to change hands after redevelopment. This way, the government intends to prevent the land owners from selling the plot for redevelopment.

Conveyance is a process in which the ownership of the land on which a particular building complex is built gets transferred to the housing societies. Many builders have not conveyed the title of the properties to the societies in the hope of availing more floor space index that may become available, or the benefits accrued to them in case the property is redeveloped.

To stop this illegal practice, the government came out with a special law to enable societies get deemed conveyance. However, in Mumbai, where there are more than 23,000 societies, only 87 have deemed conveyance because of several flaws in the new system. 

The Maharashtra Societies Welfare Association, which has been agitating for conveyance rights, welcomed the announcement, but said more problems need to be resolved. “The state should not hold the conveyance of any building if a few residents do not pay stamp duty. The title should be conveyed and those flat owners should be penalised,” said Ramesh Prabhu, chairman, MSWA. “The process should be simplified further and only then will we see a good response,” he added.  

In another move, the government has asked municipal corporations to process the proposals for redeveloping or repairing dilapidated buildings at the time when residents form a cooperative housing society and apply for deemed conveyance to the district deputy registrar.

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90% pay new property tax, but revenue dips

Kunal Purohit
kunal.purohit@hindustantimes.com

Mumbai: The good news for the civic body is that despite the vociferous protests against its new property tax system, nearly 90% of the 2.64 lakh citizens who were sent bills have cleared their dues.

The bad news, however, is that its collection has dropped by nearly Rs400 crore as it had to reduce the tax rates for various categories at the insistence of the citizens and political parties to get their backing.

According to its figures, while the revenue the old tax system could have generated is more than Rs3,300 crore, the civic body will be able to fetch only around Rs2,900 crore for the last fiscal.

Ironically, this dip comes in the face of allegations made by various citizen groups that the new capital value-based system is being introduced only so that the civic body can increase its revenue.

Civic officials admit the response from citizens has been commendable.

An official from the assessment and collection department said, “Initially, many had been skeptical because they kept hoping this system will be scrapped. But when they realised it is here to stay, they paid up.”

Between December to April, more than 1.31 lakh property owners paid tax under the new system, while from April to June-end, another 1.11 lakh cleared their dues. The civic body has collected Rs852 crore in this period, while the rest of its collections have been adjusted against the money citizens have paid through provisional bills sent out in the last three years.

 A senior civic official said, “We are happy with the collection. There are new properties that we are yet to map and send bills to. Hence, this collection will rise in the next year or two.”

Bandra-based activist Vidya Vaidya, who was among the many to protest against the system, said, “We are a city of law abiding citizens. Hence, even those of us who protested against the system have paid up, but in protest. We will continue to fight this irrational system.”

The civic body will also give refunds to taxpayers who have paid in excess in the last three years. The amount, of Rs898 crore, is due to 8.59 lakh citizens, who have paid property tax in excess more than once in the past three years.


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