Buying Gram Panchayat Land? Take Note

Buying Gram Panchayat Land? Take Note

Buying Gram Panchayat Land? Take Note

Cities lure us towards them because of the umpteen possibilities they offer, but large spaces is something they can certainly not offer. Since a zillion people like us have gathered in these city centres to explore the possibilities, space is an issue. You will have to move towards towns or rural areas in case you are looking to build a large house—basically by investing in gram panchayat land. Investing in such land is also a lucrative option for those people who want to invest in real estate to earn handsome returns since the investment costs are comparatively much lower.  Now let us see how to go about it since might not a familiar territory for a city dweller.

Gram panchayat land

As municipal bodies happen to be the owner of land falling within their limits, gram panchayats, a pre-Independence institution responsible for social-economic welfare of villages, are the owners of the land falling within their limits, villages and towns included. All agricultural land is invariably owned by gram panchayat which they have the power to lease for other purposes. Do not here that they not have the right to sell this land.

“Gram panchayat have the power to lease small land parcels meant for carrying out agricultural practices for residential use. In case one intend to purchase this land parcels, they would have to approach the sub-divisional magistrate (SDM) of the city and apply for conversion. Land use conversion, from agricultural to residential, is a key step in that direction,” says Prabhanshu Mishra, a Lucknow-based lawyer.

Section 143 of the UP Zamindari Abolition and Land Reforms Act gives the assistant collector/the SDM of the area to change the nature of a land from agricultural to residential. State laws establish a similar authority of the SDM.

In order to avoid unnecessary running around, first find out under whose jurisdiction does the land you intend to buy falls, Mishra says, and approach that particular gram panchayat accordingly.  

To get the conversion done, the buyer will have to apply with the SDM, along with all the related documents.  It is important to note at this juncture that the old documents related to the land ownership can be obtained from the tehsildar’s office.  The buyer must see the ownership history to check the legality of the property. In case you are borrowing money to purchase and build on this land, the bank will seek all these documents to establish the legal authenticity of the land.

Following this, an official from the revenue department would visit the site, and prepare a report in consultant with the tehsildar. Upon being satisfies that all conditions have been met, the SDM may give his approval for the conversion of the land from agricultural to residential.

“The buyer will have to make sure that the land does not belong to a reserved category where selling is not an option,” adds Mishra. Certain categories of owners are prohibited from selling their land.

Depending on the state where the land is being bought and converted, the buyer will have to pay a conversion charge. In Andhra Pradesh, for instance, the buyer will have to pay five per cent of the guidance value of the property as conversion charge. The buyer will also have to pay registration charges to get the land registered in his name.

The buyer will also have to company with certain guidelines at the time of construction. They will, for example, have to keep a certain portion of the land open.

The pros and the cons

Costs: It may anyway be almost impossible to purchase a land parcel in the middle of the city. Even if you can manage to find a plot close to the city, it would cost the buyer a great fortune. Gram panchayat land provides you an affordable option. For those buying purely from an investment perspective, gram panchayat is simply it! The growth prospects are immense.

Facilities: Since we are talking about land that does not fall within the municipal limits, it may or may not have the same facilities that a citizen enjoys in the form of uninterrupted power and water supply. There or may not be a sewage line. Roads, etc., may also be only in the developing stage. On the other hand, you would be much closer to a greener environment, away from the hustle and bustle of city life.

Last Updated: Tue Sep 15 2020

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