The term of many British-era lease agreements ranges from 50 to 999 years.
"The state has been losing revenue because of meagre lease rent and because hundreds of leases have not been renewed for 40 years. Now, the state will earn good money through rent," Chief Minister Prithviraj Chavan said after the cabinet meeting.
The government has revised the rent to 2-5% of one-fourth of the plot's official market value. This will apply to all plots where the agreements have expired. Henceforth, the rent will also be revised every five years as per the prevailing market rate.
The government will also give the lessee occupancy rights for a transfer fee, which will be 20% to 30% of the market value of the plot.
A lessee in Colaba who was paying an annual rent of Rs17.71 for a 570 sq metre plot will now have to pay Rs3.4 lakh, Chavan said. This policy will not apply to Brihanmumbai Municipal Corporation (BMC) and gymkhana land.