The Maharashtra government has issued a final notification allowing the conversion of leasehold lands and Occupancy Class II lands to freehold land status upon payment of a premium of up to 25% of the Annual Statement Rate (ASR) or Ready Reckoner (RR) rate. This policy aims to grant full ownership rights to individuals, cooperative housing societies, and industries, replacing the leasehold system with freehold status.
Key Highlights of the Notification
The notification, issued by the Revenue Department on March 4, 2025, outlines the premium rates applicable for conversion. These rates will remain valid until December 31, 2025.
Understanding Leasehold and Freehold Land
- Leasehold Land: The government retains ownership of the land while granting lease rights to individuals, cooperative housing societies, or industries for a specific period. Leasehold properties have restrictions on transfer and redevelopment.
- Freehold Land: Ownership is fully transferred to the individual, cooperative society, or industry, allowing them to sell, mortgage, or redevelop the land without government intervention.
Premium Rates for Freehold Conversion
The Maharashtra government has introduced revised premium rates for converting leasehold and Occupancy Class II lands to freehold:
- Individual or Private Landholders & Companies (Residential Class II Land): 15% of the ASR
- Cooperative Housing Societies (CHS) on Occupancy Class II Land: 10% of the ASR
- Self-Redevelopment Projects by Housing Societies on Occupancy Class II Land: 5% of the ASR (a reduced rate to encourage self-redevelopment)
- Leasehold Residential Land: 25% of the ASR
Impact on Property Owners and Housing Societies
This policy change is expected to benefit multiple stakeholders:
- Individual Landowners – They can now obtain full ownership of their properties without leasehold restrictions.
- Cooperative Housing Societies (CHS) – Societies on Class II land can now redevelop their properties with greater flexibility.
- Industries and Companies – Businesses owning leasehold land can now unlock their full asset potential.
- Self-Redevelopment Projects – Housing societies opting for self-redevelopment will benefit from a significantly lower premium rate of 5%.
Boost to Real Estate Development
With the elimination of leasehold restrictions, property transactions are expected to increase. This reform will enhance the market value of properties, provide greater financial security for owners, and generate higher revenue for the government.
The Maharashtra government’s decision to permit the conversion of leasehold and Class II lands to freehold marks a significant reform in property ownership. With a deadline set for December 31, 2025, eligible landowners should take advantage of this policy to secure complete ownership rights.
