The Chandigarh Administration has reduced the unearned increase on the transfer of leasehold allotted property from 33 per cent to 25 per cent. The notification of the amendments in the Chandigarh estate rules 2022 was issued Thursday.
Charanjiv Singh, president of the Chandigarh Beopar Mandal, said, “We welcome the move of Chandigarh Administration to reduce the unearned increase from 33 per cent to 25 per cent on the transfer of leasehold allotted property. As it is still very high, we urge the UT Administration to come out with a policy to convert leasehold property to freehold with reasonable charges so that this issue is closed forever. This way, there won’t be any unearned profit applicable on transfer of the freehold property.”
Unearned increase is the difference between the price paid by the original allottee/lessee and the market value of the site/building at the time of transfer. As per the amendments made by the administration, it was stated that no site or building sold by way of allotment, whether on a leasehold or freehold basis, shall be allowed to be transferred before the expiry of 15 years from the date of allotment. In case the allotee/lessee wishes to transfer after the completion of 15 years through sale/gift/mortgage or otherwise, 25 per cent of the unearned increase shall be paid to the government before registering such sale of transfer.
How is unearned increase calculated The market value of the property is assessed by the Estate Officer or any other authority prescribed by the Chief Administrator. The current market value will be assessed after calculating the average of the auction price over the last three financial years for the property or on the basis of factors the authority considers to be appropriate.
The present value of the original premium shall 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 shall be the unearned increase. During the assessment, a notice will be issued to the lessee and they will be allowed to contest the price by providing sufficient evidence.
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