Land owners slate DHA over new charges

[Lahore_Real_Estate]

Saturday, December 26, 2009
By Azeem Samar

Karachi

The imposition of the differential cost on property in Defence Housing Authority (DHA) Phase-VII extension has perturbed the prospective residents and traders of the area, The News has learnt.

Prospective residents believe that the charges have seriously diminished their chance to get any material benefit from landowning in the DHA in the near future. Concerned citizens argue that the DHA and Cantonment Board Clifton (CBC) already have a number of charges and taxes for property owners, residents, and traders of the area, and the sudden levying of such new charges will not only inflict a heavy cost to lot owners, but it will also hamper development and settlements in what is now a desolate part of DHA.

On its part, the DHA has said that its Phase-VII (extension) area, whose land is near Mehmoodabad Nullah, is open for construction by the property owners, but only after they pay the recently announced differential costs of their respective pieces of land so to settle the lease issue of their plots.

The DHA announcement in this connection, displayed at the notice board of the authority’s main office, and so far the only communiqué on the issue with concerned public, reads: “The DHA is pleased to announce that lease issue of Phase-VII (extension) has been resolved. The government of Sindh has decided to lease out the area of Phase-VII (extension) on payment of differential cost amounting to Rs1,342 million.

“The cost of differential amount will be recovered from the allottees/transferees of residential and commercial plots at the rate of Rs2,145 per square yard. Phase-VII (extension) is open for construction, and allottees/transferees are requested to pay the differential cost and get possession of their plots by 31 January 2010. A surcharge of 15 per cent per annum will be levied on delayed payment of differential cost after 31 January 2010.”

United Defence Clifton Estate Agents’ Association President Raja Mazhar told The News that the new charges under the pretext of differential cost on property owners of the Phase-VII (extension) area had been levied without any prior consultation, announcement, or communication with prospective residents of the area.

He said that the differential cost had been levied on landowners at a time when they were already under obligation to pay development and additional charges to the authority for owning property in the locality.

Mazhar said that the sudden introduction of charges on plots in Phase-VII (extension) would have a negative bearing on the real estate business and related transactions in the area, which had already been dampened due to the prevailing slump in the market. Further, he said, the idea of levying 15 per cent surcharge on differential cost after the expiry of the deadline is cause for more frustration of the property owners of the area.

DHA Town Planning and Building Control Director Colonel (retd) Zahid Akbar said that the amount to be collected by the DHA from property owners of the Phase-VII (extension) under the differential charges will be completely transferred to Sindh government. The differential cost has nothing to do with development and additional development charges for the area, he said.

“In this case, the DHA is acting merely as a post office, withholding nothing but transferring the entire amount to the Sindh government,” Akbar maintained.

He said that the revised price of the Phase-VII (extension) land, acquired from the provincial government in 1992, had been determined as Rs5.314 million per acre, and with this cost, the DHA has to pay between Rs1.3 and 1.4 billion for 282 acres of land for the area.

He said that there was an unjust resolution of the issue against plot owners of the area, as the Sindh government has been charging cost for the entire land including areas reserved for building roads and other amenity facilities in the neighbourhood. In such transaction of land, the cost of the land is generally reserved for amenities and road construction, and is not recovered from the new owners and developers of the land, he said.

A resident of DHA Phase-VII alleged, however, that the DHA had been introducing such new charges for residents and property owners of the area as it had failed to levy and recover refurbishment tax from the residents for building its new storm water drainage and roads infrastructure in the area.

Total amount of differential charges as per sizes of plots is as under:

a. 100 square yards size: amount Rs 214,500

b. 120 square yards size: amount Rs 257,400

c. 150 square yards: amount Rs 321,750

d. 200 square yards: Rs 429,000

e. 300 square yards: amount Rs 643,500

f. 500 square yards size: Rs 1,072,500.