Chandigarh: Unearned profit on transfer of allotted leasehold units cut 8%

Tribune News Service

Chandigarh, April 7

The UT Administration has reduced the unearned profit from 33 per cent to 25 per cent on transfer of properties allotted on a leasehold basis, giving some relief to their owners.

According to a notification issued by the UT Administration, no site or building sold by way of allotment, whether on a leasehold basis or freehold basis, shall be allowed to be transferred before the expiry of 15 years from the date of allotment unless in the opinion of the Estate Officer exceptional circumstances exist for the grant of permission to transfer it earlier than the prescribed period.

In case of transfer after the expiry of 15-year period by the original transferee (allottee/lessee) by way of sale, gift, mortgage or otherwise of the site or any right, interest therein, one-fourth of the unearned increase in the value, which will be the difference between the price paid by the original allottee or lessee and the market value of the site or building at the time of the permission for transfer, will be paid to the government before registering such sale or transfer.

Earlier, the owner had to pay one-third of the unearned increase in the value.

The market value for the purpose will be assessed by the Estate Officer or other such authority as may be prescribed by the Chief Administrator. The current market value of the property will be assessed in view of the average of auction price over the last three financial years for property of the same category or on the basis of such other factors as the Estate Officer considers appropriate.

The present value of the original premium will be calculated by enhancing the premium by 9 per cent per annum compounded annually from the date of payment. The difference between these two values will be the earned increase.

However, there will be no restriction of ban period and liability of unearned increase charges on transfer of the site or building allotted on a freehold basis if the allottee or transferee has paid full consideration amount, price, dues, etc, of the site.

“We welcome the move of the UT Administration to reduce the unearned profit from 33 per cent to 25 per cent on transfer of a leasehold allotted property. As it is still very high, we urge the Administration to come out with a policy to convert leasehold properties into freehold units with reasonable charges so that the issue is closed forever, as there is no such unearned profit applicable on transfer of freehold properties,” said Charanjiv Singh, president, Chandigarh Beopar Mandal.

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