State extends scheme to convert govt plots to freehold by two years

Freehold property can be defined as any estate which is “free from hold” from any entity besides the owner.

Mumbai: The state has given a two-year extension to its scheme that allows the conversion of government land to freehold property. The tenants of government-owned plots will be able to own them after paying a premium and that too at concessional rates.

HT Image

Freehold property can be defined as any estate which is “free from hold” from any entity besides the owner.

The decision was taken at the state cabinet meeting on Sunday. The scheme has been extended till March 7, 2024. Nitin Kareer, additional chief secretary (revenue) confirmed the development to HT.

As per revenue officials, the new policy could potentially impact more than 1.14 lakh leased plots across the state and around 5,000 in Mumbai that has residential or commercial structures.

The scheme, which was first launched on March 8, 2019, was extended because its objective to generate revenue for the cash-strapped state exchequer could not be fulfilled owing to the Covid-19 pandemic.

“The scheme failed to reach the people and its purpose could not be attained because of Covid. In fact, in the last three years, only 19 plots got converted as freehold,” said a senior official, wishing to remain anonymous.

With the decision, the state government has allowed the conversion of all types of land allotted to individuals for residential, commercial, agricultural and industrial use as freehold (ownership rights).

Currently, the state allots plots on two basis — leasehold and occupancy class II, which is conditional ownership. The leasehold tenants pay the government rents as low as 2% to 5% of the 25% of the total cost of the property, as per the existing ready reckoner rate.

For plots allotted under the occupancy class II category (conditional ownership), the tenant will have to pay 15% of the total price of the property for getting ownership rights and if it was allotted on lease then the tenant will have to pay 25% of the ready reckoner rate.

In case it has been allotted to a cooperative housing society, the state government will charge 15% of the total price of the property as a premium for conversion even if the land was allotted on a leasehold or occupancy class II. For plots given for commercial and industrial uses, it has set the premium at 50% of the ready reckoner rate irrespective of the type of tenancy.

The state revenue department will now issue a final notification to implement the decision.

Two days before the decision, the Federation of Grantees of Government Land (FGGL), representing cooperative housing societies on government land, had met and submitted a representation to chief minister Eknath Shinde demanding that the government should allow the transfer of leasehold land to freehold at the rate of 5% of ready reckoner rate as middle-class cooperative housing societies cannot afford a higher rate.

“We are disappointed to hear that the government has chosen to ignore our demand for 5% and charge higher rates,” said Salil Ramchandra, President, FGGL. “Many of these societies are old and dilapidated and unless they are allowed to be freehold, they cannot go for redevelopment.”

Countering the argument that lower rates will result in a revenue loss to the government, Ramchandra said, “In fact, we tried to convince the chief minister that if 5% of ready reckoner is charged, the government revenue will go up because more societies will come forward to make their land freehold and opt for redevelopment.”

With inputs from Satish Nandgaonkar