Mumbai property: Big relief for leasehold landholders as rent slashed by govt

In what comes as a big relief to leasehold landholders in Mumbai, the state government on Tuesday revised its rent charges for leasehold properties in the city. As per the cabinet’s decision, the government will henceforth charge only 1 per cent of the 25 per cent of the total cost of the leasehold property against the earlier 2 per cent as the per ready reckoner (RR) rate for residential properties. This reduction in rent rates will be given to those whose plot area size is 500 sq or less. Holders of more than 500 sqm leasehold plot area have to continue paying 2 per cent rent. Out of the total 1,663 leasehold properties in the city, 495 plots of less than 500 sqm are in Mumbai city and 93 in suburban districts.

“In December 2012, the state government had revised the rates of the leasehold lands but many people went to court against the government’s decision. They even filed the writ petition and refused to pay the increased rent. However, to give relief to residents of leasehold properties, this decision to slash rent charges was taken for the larger interest,” said senior government officials.

A note from the cabinet meeting further states that industrial leasehold property holders will have to pay 4 per cent of the 25 per cent of the total cost of the property as per the RR rate while commercial establishments have to pay 5 per cent. Leasehold land given to charitable trusts, social and cultural institutions, orphanages, and asylums have to pay 0.5 per cent rent as per this given formula to the government.

However, this concession will not be applicable to redeveloped land. According to senior government officials, this could mean dual benefits. “Leasehold landholders will now start paying rent and that will help us increase state revenue,” said an official.
(By Sudhir Suryawanshi, DNA)