Relief For Realty in Mumbai: Lease Rent Rates For Co-Op Housing Societies Cut By 50%; Refugees To Get Free-Hold Land
The Maharashtra State Cabinet took two key decisions in a meeting held on April 24 that have come as a boost for real estate market of the capital city, Mumbai.
In a move that has come as great relief to those who left Pakistan to settle in India after the Partition in 1947, the state has decided to freehold their properties. With the Cabinet decision, about 31 colonies across the state have now come under Class-I (A) category of the Maharashtra Land Revenue Code, 1966. Five of these colonies are in Mumbai ─ two in Chembur and one each in Sian, Kurla and Mulund.
So far, their properties are lease-held, the occupants require a permission from the government to sell them. An approval from authorities is also needed if an occupant wants to make any alterations in the structure. Further, the settlers have to pay half of the profits earned through the sale to the government.
For example, if a property is purchased for Rs 50 lakh and is being sold for Rs 70 lakh, the seller will have to pay the government Rs 15 lakh for the transaction.
In another key decision, the state Cabinet has decided to reduce the lease rent it charges form co-operative housing societies built on government land in Mumbai. People who are in possession of government-owned plots that measures less than 500 square metres will also see a similar reduction in lease rent charges. Only one per cent of the 25 per cent market value of the property would be charged as lease rent now. Lease charge on government land that is offered to be used for social and cultural events would go down more than half of the current rates. Only 0.5 per cent of the 25 per cent market price of the property has to be paid as lease rent in such cases.
However, the largesse is restricted to residential developments only; the change is not applicable on commercial set-ups, operating on government land.
It was in December 2012 when the state had decided to increase lease rent to two per cent of 25 per cent of the market price of the plot, inviting opprobrium and score of litigations.