Maha will levy transaction fee on development of leased plots

MUMBAI: In a move aimed at raising revenue from “every sale or transfer of residential, commercial or industrial premises in any building on government land,” the state has decided to levy a transaction fee. This will impact buildings and housing societies on around 1,300 leasehold plots in the island city, Mantralaya sources told media. Lease hold plots are those owned by the government but given on long-term lease to individuals and groups.

“The amended law is only in case a society or institution decides to redevelop the property by handing it over to a builder,” said a senior bureaucrat. “Government as lessor must get its fair share if the property changes hands,” he added.

A senior bureaucrat, however, explained that this will not affect individuals who plan to sell apartments or offices in buildings situated on government land. This clarification will allay fears that have spread in the property market over the past two days that the state would take away 50% of the sale amount from any property transaction like the sale of an apartment on leasehold property. Currently, government does levy a transaction fee on sale of flats and offices situated in buildings on leasehold plots, but the amount is not linked to the commercial value of the property. Even this amount is a matter of dispute and the appeal against it is pending in court.

In the island city, leasehold plots are mainly in areas such as Backbay, Nariman Point, Churchgate, Marine Lines, Sion, Dadar and Wadala. A notification issued by the state revenue and forest department on September 17 said the government will “recover premium or charge and share of unearned income” pertaining to “every sale, transfer, redevelopment, use of additional floor space index (FSI), transfer of development rights (TDR), or change of use on any government land in Mumbai city, Amravati and Nagpur divisions and revenue divisions in the entire state.”

Department sources said the rate at which premium is to be charged is yet to be decided and may be based on ready reckoner rates in the locality. An amendment to the Maharashtra Land Revenue Code said prior permission of government will now be mandatory for development, sale, transfer, redevelopment of buildings on government land.

Credits Times of India

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