Haryana Government Approves Policy Allowing Residential Plot Conversion to Commercial Use, Expected to Boost Property Prices

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    The Haryana government has given the green light to the ‘Haryana Municipal Urban Built-Plan Reform Policy,’ a groundbreaking move that allows the transformation of residential plots into commercial properties within planned urban schemes. According to officials, this strategic policy change aims to address the escalating demand for commercial space, bring more control to commercial activities within planned zones, and enhance urban planning in the region.

    This significant policy alteration, which was approved during a state Cabinet meeting chaired by Chief Minister Manohar Lal Khattar on October 11, carries several crucial implications for property owners and the real estate market in Haryana.

    Under this policy, property owners can convert their residential plots into commercial properties by paying conversion charges set by the Town and Country Planning Department. These charges encompass a composition fee of Rs 160 per square meter (sqm), a scrutiny fee of Rs 10 per sqm, and development charges equivalent to 5 percent of the commercial collector rate per sqm. It’s important to note that this policy will apply exclusively to planned schemes within municipal limits, excluding areas developed by the Housing Board, Haryana Shehri Vikas Pradhikaran (HSVP), Haryana State Industrial and Infrastructure Development Corporation (HSIIDC), and those governed by the Town and Country Planning Department. However, it will encompass plots allowed to be sub-divided under other government policies.

    The implementation of this policy will also involve the creation of an online portal by Urban Local Bodies, streamlining the application process for interested property owners. The online platform will facilitate scrutiny fees and document submissions. Importantly, parameters like ground coverage, floor area ratio (FAR), and plot height will adhere to the original residential scheme, preserving the intended character of these planned areas.

    Additionally, urban local bodies will carry out surveys to identify illegal commercial conversions, issuing notices to non-compliant property owners. Those served notices will have 30 days to either restore the property to its original status or apply for regularization. Failure to comply may lead to legal actions, including sealing or demolition.

    Real estate experts are forecasting a notable increase in property prices as a result of this policy shift. Ashim Chowdhury, Vice President of Research at ANAROCK Group, a real estate consultancy, anticipates that property values will rise significantly. He advises property owners to explore the option of marketing their residential properties as commercial assets, as this strategic move can potentially fetch a higher price for the plot. Commercial properties often command higher values due to their potential for diverse business purposes. However, Chowdhury acknowledges that the extent of price appreciation will depend on factors like the effectiveness of infrastructure improvements to accommodate increased traffic and commercial activities.

    Sanjeev Taneja, a real estate broker in Gurugram, believes that this policy will be mutually beneficial. Property owners will be able to leverage their assets for more lucrative commercial activities, generating increased economic gains. Simultaneously, the government will collect revenue from conversion and development charges, contributing to the overall development of the real estate market.

    While this policy presents exciting opportunities, experts advise potential buyers to exercise caution. They should be aware of potential increased utility charges, such as commercial tariffs for power and other services. Additionally, confirming the property’s title and its eligibility for the intended usage is essential to avoid future challenges and complications.

    So, the Haryana government’s ‘Haryana Municipal Urban Built-Plan Reform Policy’ is set to transform the real estate landscape, enabling property owners to unlock new economic opportunities and potentially enhancing property values while promoting better urban planning and controlled commercial activities within planned zones. However, buyers should approach this development with due diligence, considering all the associated costs and ensuring the property’s eligibility for conversion to commercial use.

    Also Read: Gurugram Global City Seeks Developers for Thriving Mixed-Use Plots

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