Matter for opinion: As per my understanding, Collectors’ premium has to pay on every transfer of commercial property in Nariman Point, Mumbai. 1. If someone bought commercial office in the year 2002 and not yet paid the collectors premium, how much premium he has to pay now and what is the interest and penalty on such delay payment? 2. Is collector’s premium applicable on transfer of property to daughter by registered gift deed? 3. Is collector’s premium applicable if Private Limited Company convert into LLP?
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According to a state government notification, the collector charges Rs 200 to Rs 500 a sq ft when any apartment changes hands and Rs 1,500 a sq ft during an office sale in the island city.
2) it would be applicable even in case of transfer of property by gift deed
3) it is applicable in case of transfer ,gift ,sale of property
Land is a state subject. In a state, government-owned properties fall under the control of the revenue department, and the ownership of such properties vests with the city collector. For developing housing projects on such land parcels, developers, state as well as private builders, have to take the collector’s permission.
Since these are leasehold properties, residents of such housing societies are legally acknowledged as Class-II occupants, and their rights are limited when compared to Class-I occupants who own freehold properties.
For renting, mortgaging, gifting and selling these properties, the property owners need the prior permission of the collector. Apart from taking the collector permission to carry out the transaction, property owners have to pay a transfer fee if they plan to sell their property. After a revision on transfer charges was implemented last year, rates of collector properties have increased four times in the city.
In case a buyer transferred the membership within five years of formation of such societies in Mumbai they will have to pay Rs 1,000 per square foot or three per cent of the ready reckoner rates prevalent in the area, whichever is higher, as transfer fee. In the case of transfers or sale of apartments after five years of society formation, an amount equal to two times the transfer fee, calculated as per the revised rates, would be payable. In case of leave and licence, the owner has to pay five per cent of the total amount earmarked in the lease agreement.
With the government dragging its feet on conversion of collector’s land to freehold, the redevelopment of 3,000 societies in Mumbai and 22,000 across the state on such plots is stuck for almost two years.
The societies have been demanding an amnesty scheme to convert their society land from Class 2 (collector) to Class 1 (freehold) be implemented. This would ensure that the land would be freed from government control.
However, one can regularise the construction by taking the collector’s permission after paying a penalty, which would be double the transfer charge.
Converting the land to freehold would end dependency on the collector.
Dear Client,
As per a Mumbai Government Notification released in 2016, the Collector shall charge Rs 200 to Rs 500 per sq ft when any apartment is transferred at the Nariman Point or even Mumbai.
It is to note that in the matter of Aspi Chinoy Vs State, the Senior Counsel of Bombay High Court challenged the demand by the Collector of transfer charges, wherein the Division Bench held that State Government has no power to demand such Transfer Charges.
However, in case of such demand, the party has all the right to file a Writ Petition to levy such Premium.
Thereby, in spite of the applicability of such Collector Premium in the case of transfer to the daughter by registered gift deed, it is available for a contest at the Court.
For a Private Limited Company into LLP, it shall not be applicable in case of conversion separately.
Thank you.
It depends on value of the property
Yes it's applicable.
Yes it's applicable
