High premium hurdle to return land to ‘freehold’ | Pune News

Pune: Managers of housing companies on collection lands across the state are reluctant to transfer them into full ownership due to the high premiums for the conversion process.
The scheme, which was introduced for three years from March 2019, expires this year and it would be up to the current government if it wishes to extend it.
“The state has more than 5,000 housing corporations on Class II land, or collectors’ land, but few were enthusiastic about converting the land to freehold – a status that would allow any type of of redevelopment work, a tax official said.With premiums of up to 50% of the Ready Reckoner (RR) rate, the scheme has seen few takers, the official said.
“The state government will take a final call on the future of the scheme. But, there is not much response from the companies,” the official said. Nearly 177 requests (see chart) had been filed but not executed as companies failed to act during the past two-year pandemic period.
Maharashtra Society Welfare Association chairman Ramesh Prabhu said the notification was not helping housing companies as the government charged such high premiums. “It doesn’t matter if they grant an extension.
The current regime is not advantageous for housing companies. It is necessary to reconsider the whole proposal,” he said.
Prabhu said the response was bound to be poor as base premium fees ranged from 15% to 50% of RR rates, depending on property class.
He said: “Most of these housing companies have elderly people and it will be difficult for them to pay such high premium rates. If the current government decides to expand the scheme, it should do so at a minimum premium rate of only up to 5%.
Maharashtra State Housing Cooperative Federation Deputy Chairman Suhas Patwardhan said the representative body of 1.20 lakh housing corporations in the state believes that a nominal premium should be charged as there is no need to have this program.
“The project arrived three years ago. The pandemic has made it impossible for any housing company to pay such huge premiums for the conversion,” he said.
Other citizens’ groups said the premium charged by the government was unjustified.
“Most of these housing corporations are in a dilapidated state and in dire need of redevelopment. But the high premium makes the whole redevelopment project unviable,” said a member of a housing corporation.
Depending on the year the land was donated, the premium ranges from 15% to 50% of the RR rate.
As the conversion plan ends on March 8 (Tuesday), consumer groups fear the government will increase the premium to 60% for housing companies and 75% for individuals.

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