From April 1, pay 5 times more for freehold conversion in Delhi

Delhi/NCR

You will have to pay nearly five times higher ground rent from April 1 while applying for freehold of properties in prime locations of the capital, which have been leased out by the land and development office (L&DO) under the urban development ministry.

Even those property owners who converted their leasehold properties to freehold between 2000 and 2017 would have to pay the revised rent, specific to the year when the deed was approved. Sources said L&DO had taken affidavits from all the applicants with an undertaking to pay revised rent at the time when they applied for freehold.

The urban development ministry has approved aligning the land rates of L&DO at par with Delhi Development Authority (DDA) and it issued a circular on February 15. While DDA has been revising its land rate periodically, L&DO has not revised it since 2000. Rates of DDA are at least five times more than the L&DO’s rates.

Ground rent, which is paid annually by the lease holders to the land owner, is in the range of 2.5% to 5% of the premium or cost of the land in the case of L&DO properties. These properties are located in prime areas including Connaught Place, Hailey Road, Mandir Marg, Parliament Street, Khan Market, Prithviraj Road, Golf Links, Defence Colony, Sundar Nagar, Vasant Vihar and Nizamuddin, to name a few.

So far, L&DO has leased out around 65,000 properties in Delhi and about 30,000 of these have been converted to freehold.

Sources said the revised rates of land will be different, depending on the localities and type of the property.

According to the last revision of land rates by L&DO in 1998, one sq metre of residential property in CP cost nearly Rs 18,500 while a sq meter of commercial property cost about Rs 58,000. Once the rates are notified, the minimum cost of one sq meter of residential property would increase to about Rs 92,000 and commercial property price to around Rs 2.9 lakh. So, the ground rent will also increase substantially.

This is also likely to increase L&DO’s annual revenue from rent substantially. Moreover, one time clearing of old dues by freehold property owners may generate Rs 2,000 to Rs 3,000 crore.

Announcing the revision of land rates, L&DO said, "The revision is due from April 1, 2000. It has been decided by the competent authority to align the lane rates with rates notified by DDA with effect from April 1, 2000." The order said since the implementation of the revised rates entails modification of the specific rates on the web-portal, so applications for conversion of land has been kept in abeyance till this March end.

Source - MagicBricks