Following the directions of Ministry of Housing and Urban Affairs (MoHUA), the Delhi Development Authority (DDA) is all set to increase the conversion charges from leasehold to freehold for commercial and industrial properties in the national Capital. The conversion charges from leasehold to freehold in commercial properties have been proposed to increase from Rs 1,12,050 to Rs 1,23,255 per square meters for Central, South and Dwarka region.
Similarly, for the West, North, East and Rohini area, it is proposed to increase from Rs 77,815 to Rs 85,597 per square meter. For Narela commercial property, it is proposed to increase from Rs 31,127 to 34,240 per square meter.
As per DDA guidelines, a leasehold property in Delhi can be converted to freehold by paying a surcharge and conversion charges applicable on the date of application.
As far as industrial properties are concerned, conversion charges from leasehold to freehold properties in Central, South and Dwarka has been proposed to increase from Rs 67,232 to Rs 73,955 per square metre while for the West, North, East and Rohini, it is proposed to increase from Rs 46,690 to Rs 51,359 per square metre. Interestingly, commercial plots located in Mall areas and multiplex complexes, the rate will be further enhanced by 50 per cent.
Sources in the MoHUA said that these proposals would be brought before the Delhi Development Authority's Board meeting on Monday. "While working out the land rates for conversion charges for the subsequent years through the average auction rates of relevant years were duly considered but in view of the huge fluctuations in the market rates and the fact that real estate trend may not prevail permanently and can not be said to be real indicator for the purpose of determining the increase in conversion charges, an equitable increase at the rate of 10 per cent equal to expected cost of money was accepted by the authority subject to final approval of MoHUA," the proposal said.
The proposal further said that the rates of conversion of industrial plots from leasehold to freehold are fixed at 60 per cent of the commercial rates for 100 floor area ratio except for Narela Industrial area which is taken as 75 per cent. However, these rates are linked to plot area instead of floor area ratio.
These rates will be applicable only for calculation of conversion charges for the conversion of commercial or industrial properties from leasehold to freehold and shall also be applicable for commercial built-up properties, it said.
The list of 29 industrial areas include GT Karnal Road, Rajasthan Udyog Nagar, lawrence Road, SMA, Wairpur, Badli, Bawana, Kirti Nagar, Shahdara, Tilak Nagar, Okhla, Rani Jhasi Road, Naraina Industrial area.