Ownership to be Free-hold in Noida

The authorities of Noida, Greater Noida and Yamuna Expressway will soon make ownership of property free-hold, in line with the policy announced by the UP government. 

There is good news over property ownership. If the new ownership policy recently announced by the government of Uttar Pradesh is implemented, the properties at Noida, Greater Noida, and even Yamuna Expressway, will become free-hold. Currently, land is allotted on lease for 90 years in Noida-Greater Noida. The authorities have formulated different slabs for the annual lease and charge 10% for residential property and 27.5% for institutional, industrial and commercial establishments, of the total value of the property. With the implementation of the new ownership policy, when land will be allotted on free-hold, those who have bought or are planning to buy flats or plots from builders or the authority could actually become the owners. According to urban land policy (being followed by the Delhi Development Authority), land ownership is of two types: free-hold or lease-hold. In freehold, ownership is for the perpetuity while in leasehold, it is for specified time, which can vary between 30 years and 100 years, in general. In Delhi, up to 2008,of the 82,948.84 acres of acquired land,75,609.84 acres has been allocated for residential, commercial, institutional, industrial, green areas and infrastructure projects like roads. Initially, the whole of the land was given to end users on lease, with the authorities being paid ground rent; but slowly, all these are being converted into free-hold property, as the authorities are facing an uphill task in realising the dues with thousands of cases pending in the government departments. Therefore, the DDA decided that most of the land should be free-hold except institutional and commercial.
The UP government has taken a leaf out of this experience and has decided to follow suit. It is highly likely that the other NCR cities like Gurgaon, Faridabad and Ghaziabad will also convert the ownership policy from leasehold to free-hold.

Impact of the proposed Land ownership policy:

In Noida-Greater Noida, individual buyers, even builders, are not the actual owners of the property on which they have invested a huge sum of money in constructing buildings and developing physical infrastructure like roads and sewerage. According to the existing lease policy, flats and plots are subleased by the authorities to users. From the records provided by development authorities in Noida, of a total of 20,316 hectares, around 10,000 hectares has already been developed. The remaining area will be developed in the next phase. According to the master plan of Yamuna Development Authority, of a total of 2,30,000 hectares (up to Agra),50,000 hectares (up to Jewar) is being developed in Phase 1,for both residential and commercial purposes. In Greater Noida,49.7% of a total of 36,000 hectares has been used for residential (23%),commercial (7%),and industrial (19.7%) development. The Master Plan 2031 of the Noida authority hopes to build 2.5 lakh new houses along the expressway and adjacent to Noida Extension in the next three years. Out of this, nearly one lakh houses are being constructed along the expressway under group-housing projects. The remaining 1.5 lakh houses have been proposed adjacent to Noida Extension and Sectors 74,75,76,78,79,113,116 and 117.Once the new land ownership policy is implemented, several buyers, developers, and even the development authority (in terms of revenue generation) will be benefited. Rama Raman, the chief executive officer of Greater Noida and Yamuna Expressway Development Authority, says: "If land is converted from leasehold to free-hold, then a substantial amount has to be paid by the users to the authorities concerned for the conversion. The conversion charge is not yet decided. We are working on this proposal. "Ram Gopal Gupta, a former citypolicy planner of DDA, says: "There is no difference in the value of land, whether freehold or lease hold; it all depends on land use, which would be followed according to the legal documents, maybe of the NCR or the master plans. Master plans of specific cities and zonal plans if any have not been taken account of. Before implementing the proposed land ownership policy, these must be properly taken into account. "Anil Sharma, the chairman and managing director of Amrapali Group, says: "A free-hold property is always preferable compared to a lease-hold property. Once the new ownership policy comes into force, transfer of property will become simpler. Financial institutions, investors and foreign investors are comfortable with free-hold properties. For the government, it is a very good source of revenue generation and in updating the revenue record. "Rakesh Yadav, the managing director of Antriksh Group, says: "Once the new ownership policy is implemented, it will become easier to sell property in Noida and Greater Noida. "RK Arora, the chairman and managing director of Supertech Ltd, however, feels that conversion of land ownership to free hold from the existing system of lease-hold will have some side effects also. He says that lease rent which has been one of the major sources of income for the Noida and the Greater Noida Industrial Development Authority for maintenance and developmental activities, will no more be available once land becomes free-hold. These authorities are already cash-starved and if this proposal is implemented, they will be compelled to abandon various infrastructure projects. The MNCs which set up their facilities in Noida and Greater Noida will flee in the absence of maintenance and development work. All this may adversely affect the flourishing ITITeS industry here. "The authority will have a very limited control over land use, which will be a deterrent for planned development in the area. In view of these discouraging factors and considering the unique circumstances in Noida and Greater Noida, it will not be advisable to change the existing lease-hold system to a freehold system till all the infrastructure projects like the Metro line, highways, power, etc, are in place, "Arora said.

Economic Times, New Delhi, 11-05-2012