State reduces premium for making govt land freehold to 10% | Mumbai news - Hindustan Times

State reduces premium for making govt land freehold to 10%

Mar 14, 2024 06:54 AM IST

Maharashtra govt reduces premium for converting govt land to freehold for housing societies from 15% to 10% of ready reckoner rates, benefiting ownership rights ahead of elections.

MUMBAI: Ahead of the two crucial elections due this year, the Maharashtra government has decided to further reduce the premium charged for converting government land to freehold, bringing it down from the existing 15% of the ready reckoner rates to 10%. The concession, however, is limited to housing societies.

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The decision, which was taken in the state cabinet meeting held on Wednesday, will benefit those living on Occupancy Class II (conditional ownership) lands. For those housing societies that are willing to go in for self-redevelopment, the concession has been further reduced to 5% of ready reckoner rates.

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The move will benefit housing societies looking to get ownership of the plots they are situated on. This will cause a large potential loss to the state exchequer but with two crucial elections ahead, this is seen as a pragmatic step.

In 2019, the state government had brought in a three-year scheme that allowed conversion of government land to freehold by paying a premium that was 15% of the ready reckoner rates. The scheme was given a two-year extension that ended on March 7 this year.

The revenue department was of the view that the new concession should be made applicable to only those housing societies who were ready to go in for self-redevelopment, as it would have financial implications. However, in the run-up to the polls, the state brought down the premium, as it was under pressure from elected representatives of the three ruling parties.

“There are many societies in Mumbai and Mumbai Metropolitan Region (MMR) which are constructed on government-owned lands, and the decision will help them in getting ownership rights,” said a senior official from the state revenue department.

In 2016, the Devendra Fadnavis-led BJP government decided to unlock government lands across the state by sanctioning ownership rights to plots given on lease and Occupancy Class II by charging 50% of the ready reckoner rates as a premium, be it for residential or commercial use.

In the case of cooperative housing societies, it had decided to charge a premium of 25% of the ready reckoner rate even if the land was allotted on leasehold or on Occupancy Class II. Later, the concession scheme was launched, bringing down the premium to 15%.

The state government allots plots broadly on two bases—lease and Occupancy Class II. Leasehold land can be used only for permitted activities and can remain with the lessee for a determined period by paying annual rent. Plots allotted under Occupancy Class II give conditional ownership, in which the allottee does not have to pay annual rent.

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    Faisal is with the political team and covers state administration and state politics. He also covers NCP.

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