Are you aware of DDA’s hold on freehold conversion? For thousands of Delhi homeowners, converting a property from leasehold to freehold has long been a crucial step, often taken just before selling, transferring, or mortgaging a home, but this routine process has now hit a sudden pause.
The Delhi Development Authority (DDA) has halted the conversion of leasehold properties to freehold, following directions from the Union Ministry of Housing and Urban Affairs (MoHUA). The move comes amid an ongoing review of land rates, leaving property owners in a state of uncertainty.
Why Has the DDA Stopped Freehold Conversions?
The pause is linked to a broader policy shift underway across central land-owning agencies in Delhi. The Land and Development Office (L&DO), another body under MoHUA, recently decided to adopt Delhi government-notified circle rates to calculate conversion charges.
Until now, both DDA and L&DO followed their own land valuation systems. With the L&DO officially switching to circle rates from January 1, the government appears keen to bring uniformity and transparency to the conversion process.
However, the Delhi government itself is currently revising circle rates. As a result, authorities have chosen to temporarily suspend conversions rather than apply outdated or soon-to-be-revised valuations.
What’s the Current Status?
- The DDA’s online portal for leasehold-to-freehold conversion is not operational.
- L&DO conversions have been closed since December 2022 while rates and standard operating procedures (SOPs) are being revised.
- Both DDA and L&DO are expected to resume conversions together once the new circle rates are notified.
Why Freehold Status Matters?
Under a leasehold system, the government remains the landowner, and the allottee holds the property for a fixed period, subject to multiple conditions. Freehold ownership, on the other hand, gives absolute rights over land and building, making it easier to sell, transfer, or mortgage the property without seeking prior approvals.
This is why many property transactions in Delhi depend on timely freehold conversion.
A Policy Rooted in History
DDA initially allotted land and flats only on a leasehold basis in the 1970s. It was during the economic liberalisation era of the 1990s, under the P.V. Narasimha Rao government, that the policy shifted toward granting freehold rights. Over time, older leasehold properties were also brought under the conversion framework.
The conversion rates for residential properties were last revised by DDA in 2011. While commercial land and industrial land rates saw a 10% hike last year, residential rates remain due for an update, another reason behind the current review.
How Conversion Charges Are Calculated?
Under existing policy:
- Conversion involves a one-time payment linked to plot size and officially notified land rates.
- Charges apply only to areas exceeding specific thresholds.
- Original allottees and lessees receive rebates ranging from 25% to 33%, making conversion significantly cheaper for them.
Any revision in circle rates could directly impact how much homeowners will eventually have to pay.
What Should Property Owners Do Now?
For the moment, homeowners have little choice but to wait. If you’re planning to sell or transfer a leasehold property, timelines may need adjustment. Legal advisors and real estate experts recommend keeping documentation ready and closely tracking announcements from the Delhi government and MoHUA.
While the pause may be inconvenient, officials suggest the eventual outcome could bring a more uniform, transparent, and updated valuation system, one that aligns central agencies with state-level market benchmarks.
The Road Ahead
Once the revised circle rates are notified, conversions for both DDA and L&DO properties are expected to restart with a new SOP in place. Until then, Delhi’s property owners remain in a holding pattern, watching closely as a key piece of the capital’s real estate machinery undergoes recalibration.