Gaothan: Know all About Gaothan Property - risks and benefits

Gaothan properties are land parcels outside the city limits of Maharashtra and are available at affordable rates. However, you should do the due diligence if you plan to purchase such properties. Some of these properties fall under disputed lands due to ownership papers.In this blog, you will get a comprehensive overview of what is gaothan property, its legal framework in India, government schemes for them, and the documents required to buy it.

• Gaothan property is land available outside the city boundaries of Maharashtra.
• The state government acquired these lands from the villagers for development projects under the 12.5 gaothan expansion scheme.
• The scheme offers the villagers 12.5% of the land and the remaining to authorised builders and cooperative societies for residential property development.
• Due to issues in establishing the legal ownership of these lands, some scammers can sell you these lands at very cheap rates but without authentic land ownership documents. Thus, it is important to understand what is goathan land.
• While these provide an investment opportunity, a gaothan property should be purchased only after due diligence.

Gaothan property refers to land in and around the rural areas of Maharashtra. Gaothan meaning is derived from two Marathi words, ‘Gaon’, meaning village and ‘ Than’, meaning site.Under the Maharashtra Land Revenue Code, 1966, they are defined as land pieces that are situated within the geographical boundaries of a village, city, or town. This legal framework plays a crucial role in managing and developing Gaothan lands.Such properties can be utilised to build residential homes, commercial sites, religious sites, and societal welfare units like schools, parks, playgrounds, community centres, medical centres, etc.

Benefits of Gaothan Property

After knowing what is gaothan land , buying it offers various benefits, provided you have done your proper investigations regarding the project ownership. Some of the benefits of gaothan properties are:

• They are available at a sub-par rate compared to the developed areas within city boundaries. Thus, you can get potential wealth-creating investment opportunities.
• You can be a part of and contribute to the State government’s villagers' development program.
• Gaothan properties usually are available outside the city limits, offering cleaner air, a peaceful vicinity, and a scenic location.

Gaothan properties offer the unique advantage of being comparatively affordable compared to properties within the city boundaries. The circle rates of various properties vary according to demographics, making them a potentially smart investment option.Looking to buy a home? Aditya Birla Capital Limited offers home loans at competitive rates.

Gaothan properties are legal.The legality of a property's sale depends on the legal documents. However, some of these properties have been involved in ownership disputes in Maharashtra. The issue arises when fraudulent developers try to sell the property without proper ownership documents or with fake papers at lower prices.It is suggested you buy land parcels through authorised developers only. The State government of Maharashtra has a promotional scheme, the 12.5 per cent Gaothan Expansion Scheme (GES) of the City and Industrial Development Corporation (CIDCO) to legalise and promote the sale of gaothan land while protecting you from any fraudulent land scam.Additionally, you should familiarise yourself with any restrictions applicable to such land for its future use. This will help you make better decisions.In 2019, the Honorable Bombay High Court temporarily halted the BMC (Brihanmumbai Municipal Corporation) 's acquisition of more of these land parcels. This indicates that no new buildings are being built under these schemes. It becomes important to consult with the revenue department before purchasing any gaothan property.

The Gaothan expansion Scheme (GES), also called ‘ sade barah takka’ plot scheme, is a tripartite agreement between the villagers, the state government, and the builders/cooperative societies. According to the agreement, CIDCO (City and Industrial Development Corporation of Maharashtra ) provides the villagers with 12.5% of the land acquired by them for development projects.The remaining gaothan lands are legally transferred to a third party, generally builders or cooperative societies. There is a payment of transfer charges for authorised transfer. In these cases, the transferee gets a demarcated property title from the authority to further sell or transfer such property.Now, you, as a purchaser can buy a property from legal transferees. You will have an unambiguous title with proper legal documents. Your property will not be liable to attract a dispute.If the transferee is a person other than a developer or a cooperative society, the development authority will approve the transfer after paying the applicable transfer fee. Such transfers are only approved after the construction is complete and the occupancy certificate and the lease deed (if applicable) are issued.

Developing a gaothan property through GES is the state government’s attempt to address the rising urban population and shortage of hygienic living conditions. Through GES, it aims to provide land to residents at subsidised rates.It requires the usage transition of village land to a residential project under the District Collector's supervision. The collector conducts sessions with the village committees to ensure fair compensation and relocation of the villagers.Once finalised, the Department of Town Planning develops an extension plan. Section 44 of the MLR (Maharashtra Land Revenue) code promotes buying such properties. Agricultural landowners within 200 m of such land can purchase these properties. However, once the state government acquires them, agriculture practices can no longer continue on them.

Maharashtra Residents

Cooperative Housing Societies

Developers & Builders

Agricultural Landowners

Corporates & Investors

Government Entities

Non-Residents (NRIs)

• Citizens with valid identification and residence proof.
• Legal entities formed for collective property purchase.
• Authorised by the government under the Gaothan Expansion Scheme.
• Those owning farmland within 200m of Gaothan land.
• Companies seeking real estate investment opportunities.
• For public infrastructure and development projects.
• Allowed with RBI and state government approval.

Verify Land Legality

Title Clearance

Legal Due Diligence

Obtain Necessary Approvals

Check Development Restrictions

Register the Property

Mutation and Possession

• Check whether the land is authorised under the 12.5% Gaothan Expansion Scheme.
• Ensure the seller has a clear title and proper ownership documents.
• Consult the Revenue Department to verify land records and ownership history.
• Get approvals from the municipal authority and Town Planning Department.
• Ensure no restrictions apply to future use under the Maharashtra Land Revenue Code.
• Execute a registered sale deed with stamp duty and registration fees.
• Apply for mutation to update land records and take legal possession.

You must provide the following essential documents at the time of buying a gaothan property :

• Award Copy : This document is issued by the development authority and is evidence of 12.5% land ownership to the allottee (affected villager). It includes the allottee’s name and plot details.
• Letter of Allotment : This document is issued by the development authority and is evidence of land ownership to the third party.
• Letter of Intent : The letter of intent is issued by the development authority to the allottees who have the award copy.
• Lease Agreement: These land parcels are usually leasehold properties between the owner and the development authority. Thus, the lease agreement becomes a crucial document.
• Tripartite Agreement : The agreement between the villager, the third party, and the state government that contains all information about the property and the transfer rights.
• Transfer Charge Documents : This is the proof of transfer fees paid to the government as applicable.
• Final Order : This document is issued to the allottee and acts as proof of the property's title transfer

Gaothan property may provide a substantial investment opportunity for property buyers but comes with certain risks. Your risks may be covered if you buy these properties from authorised builders and cooperative societies who bought the land directly from the State government.However, some fraudulent real estate developers may try to sell you unauthorised land. You may lose your capital since these land parcels may not have legal land ownership documents. Therefore, due diligence is a must before buying a gaothan land. You can take the help of legal consultants and the Revenue Department to establish the legality of such lands.Planning to buy a home by availing of a home loan? Check your equated monthly instalments (EMIs) with Aditya Birla Capital's home loan calculator.