HT Explainer: Pay 55 times old rates to convert your properties from leasehold to freehold in Chandigarh
The notification of conversion with the new rates — that take the land rate in the formula for calculating the conversion amount as the collector rate — was issued on Wednesday.punjab Updated: Oct 26, 2017 11:10 IST
With UT administrator VP Singh Badnore approving revised rates for conversion of residential properties from leasehold to freehold, around 45,000 owners will have to pay 55 times the old rates if they want to get ownership rights — meaning get the property registered in their name.
Most residents are disappointed and likely to continue to pay the annual lease that ranges between Rs 200 and Rs 5,000 to either the Estate Office or the CHB, as the case may be.
Of the properties still on leasehold in the city, there are 25,000 flats under the Chandigarh Housing Board (CHB) with 20,000 under the Estate Office. In these properties, there is no registry and sale and purchase happens only on consensual transfer.
The notification of conversion with the new rates — that take the land rate in the formula for calculating the conversion amount as the collector rate — was issued on Wednesday.
Previously, before putting a decision on the issue in cold storage for three years, the rate was taken as Rs 1,710 per square metre. Now, the applicable rate is conversion rate or the market price.
What it means?
Now, people can apply for conversion and get property transferred on their name, a huge relief, but have to pay a huge amount.
However, the rates have come as a huge shock to the residents as to convert a 14-marla flat will cost Rs 20 lakh.
Most residents are disappointed and likely to continue to pay the annual lease that ranges between Rs 200 and Rs 5,000 to either the Estate Office or the CHB, as the case may be. This move will be prompted by the fact that after 99 years, the ownership will, under the rules, pass on to them.
What is leasehold?
A property on leasehold can be occupied for a limited period, mostly for 99 years. The ownership remains with the UT administration.
What is freehold?
The person having freehold of property is its owner and can utilise it for any purpose.
Realty market not too enthused
If rates would have been reasonable, as had been previously proposed at Rs 1,710 a metre, it will have been for the local real estate market as sale and purchase of properties will have increased. Chandigarh Property Association has written to the Union home minister, demanding that the rates not be implemented.
How was the decision arrived at?
The UT administration’s decision came after the Union ministry of urban development clarified that the power to fix conversion charges had been delegated to the administrator at the time of sanction that was given to the original scheme in 1996.
No conversion charges below 50 square metre
here will be no conversion fee for the plots below 50 square metre and EWS/cheap houses/industrial houses as was in the originally crafted Chandigarh Conversion of Residential Lease-hold Land Tenure into free-hold Land Tenure Rules, 1996.
UT to create Urban Development Fund
The UT administration can earn huge revenue and said amount will be deposited into a new fund, Urban Development Fund, to create infrastructure.
Shivraj Patil had imposed ban in 2013
In 2013, the then UT administrator Shivraj Patil had imposed a ban on the conversion of property, leaving the decision to the MHA. Patil was of the view that allowing conversion will make the leaseholder an owner, which couldn’t be allowed at a price lower than the market price.