Everything you need to know about Collector Passing Property
On March 5th, the Maharashtra government allowed the conversion of collector’s land given for housing and non-housing projects into freehold land. Earlier to get the land converted for housing purposes, the premium owner had to pay ready reckoner rate of 50 percent which is not reduced to 15 percent.
Last year, the government hiked the fees for the conversion of collector’s property, which was immediately criticised by the landowners. The move was made to get more revenue for the state. Although, the move did fuel the age-old debate of how collector’s properties are different from any other property.
Before we proceed further, let us discuss what a collector’s property is? Land as a whole is state property. All the government-owned properties fall under the revenue department. Any construction on such properties needs the permission of the collector. Only after obtaining the consent from the collector and necessary paperwork done from the municipal body, the builder can start working on the project.
Collector’s properties are generally given out on leasehold basis which spans for 99 years. Since they are leasehold properties, the occupants of such properties are known as Class II occupants. The rights of such occupants are limited as Class I occupants who own freehold properties.
If the owner wants to rent, lease, and gift or sell the property, they need permission from the collector. If the property is to be sold, then the owner needs to pay transfer fees to the collector. The rates ofcollector’s properties increased four times after the hike in transfer fees was implemented.
If the buyer is selling the collector’s property five years after purchasing it, then they will have to pay Rs 1,000 per sq foot or three percent of the ready reckoner rate, which every is higher as the transfer fees. If the transfer is taking place after five years of the completion of the property, then the amount twice the transfer amount is payable in such case.
If proper permission was not taken from the collector, then it can lead to issues in transferring the property. The registrar’s office has temporarily stopped registering properties built on collector’s land to end the practice of not taking collector’s permission beforehand.
After the lease has expired, the buyer will have to pay the fixed amount of money to get the lease renewed. However, it is directly on the collector to either accept or reject the lease application. Societies have been asking for the leasehold properties to be converted to freehold properties so proper development can take place.
Should one invest in such properties?- These properties are often located in posh localities, but one should remember that the transfer fees and the renting fees are pretty higher than any other locality.
- The paperwork for such properties is more as other additional approvals are required.
- On the bright side, the process of getting a loan for such properties is much easier than other properties.
- If in case there is any issue with the builder, the buyer can approach the RERA authorities as these projects fall under RERA gambit.
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