SATTA PRAKAR B PROPERTY VALUATION
Saturday Brainstorming Thought (296) 11/10/2025
By:-Er. Avinash Kulkarni
9822011051
Chartered Engineer, Govt Regd Valuer, IBBI Regd Valuer,
Rera Certified Consultant, Black Money Act Regd Valuer
In Maharashtra, Satta Prakar B refers to land with restricted ownership rights, which significantly impacts its valuation compared to properties with Clear, Class – 1 ownership
The valuation process must account for these limitations, as they reduce the property’s marketability and potential uses
Satta Prakar B Property
1) It is a type of land ownership with limitations imposed by the State Government
2) Land is often given for a specific purpose, such as to a landless person or for agricultural use and the ownership is not freely transferable
3) The owner cannot sell, mortgage or transfer the land without prior permission from the Collector or other competent authority
4) The property deed (7/12 extract or property card) will include an annotation stating Satta Prakar B (restricted tenure)
The Valuation process for Satta Prakar B Property
Valuing a Satta Prakar B Property is more complex than a standard valuation and involves two key figures
The market value of the property
And
The unearned income due to the Government
1) Determine the unrestricted market value
First, the valuer assesses the property’s value as if it had full ownership rights
A) The Comparative Method
This involves comparing the property to recent sale prices of unrestricted land with similar characteristics in the same area
B) Ready Recknor Rates (Circle Rates)
The valuation is also based on the minimum value for property transactions set by the government
In Maharashtra, this is known as the, Annual Statement Rates ,(ASR)
2) Calculate the Unearned Income
This is the portion of the appreciated land value that the government is entitled to recover when the property is sold or converted
This is a critical factor is is generally calculated as below
A) Unearned Income
Unearned Income = (Current Market Value – Original Purchase Price) X Percentage as per government rule
B) This percentage and the exact calculation are determined by specific government circulars and the original terms of the grant
3) Deduct the Unearned Income
The final valuation reflects the unrestricted market value minus the amount of unearned income that must be paid to the government to convert the land to Class-1 tenure
4) Issue the Valuation Certificate
The certified valuer provides a detailed outlining the valuation and the specific calculations involved
This valuation report is legally admissible
Factors influencing Valuation of Satta Prakar B Property
1) Lower Market Value
Potential buyers are less willing to pay full market price for a property that they cannot freely sell, transfer or develop
2) Conversion Cost
The value is heavily influenced by the cost and process required to convert the land from Satta Prakar B to Satta Prakar A
The valuation must account for the fees and charges payable to the government for this conversion
3) Government Fees
The specific fees for conversion vary by district and are based on the ready reckoner rate (Government-defined minimum value) at the time of application
4) Market Demand
The demand for the restricted properties is typically lower
A valuer nuse assesses the likelihood of finding a buyer willing to navigate the conversion process, which impacts the potential selling price
5) Location and Potential Use
The property’s location and its potential for development remain key factors
The valuation must be done with the understanding that this potential can only be unlocked after a successful conversion
6) Uncertainty and Risk
There is a certain level of risk and uncertainty associated with the government approval process of conversion
This risk factor is incorporated into the valuation, leading to a lower overall value
Steps for Valuation of Satta Prakar B Property
1) Identity the Ready Recknor Rate
Determine the current ready reckoner rate for the property’s location from the local sub-registrars office
This provides a baseline value
2) Estimate the Conversion Cost
Calculate the approximate government fees for converting the land from Satta Prakar B to Satta Prakar A
This is a crucial deduction from the potential unrestricted value
3) Determine the Unrestricted Market Value
Assess the market value of the property as if it were a Satta Prakar A property, using comparable sales data for similar unrestricted properties in the area
4) Apply a Discount for Restrictions
Calculate the final valuation by starting with the estimated unrestricted market value and subtracting the conversion costs and an additional discount to reflect the time, effort and risk involved in the conversion process
Government fees for change Satta Prakar B to Satta Prakar A in Maharashtra
In Maharashtra, changing a property from Satta Prakar B (Restricted Occupancy) to Satta Prakar A (Class 1 Occupant) involves paying a Nazrana or conversion premium to the government
The fee is based on the current market value of the land, also known as ready reckoner value
The specific fee depends on the purpose for which the land was originally allotted
1) For land originally granted for residential purposes (Leasehold)
The Nazrana is 25% of the current market value (Ready Recknor Rate)
2) For land originally granted for residential purposes (Occupancy Rights)
The Nazrana is 15% of the current market value
3) For land originally granted for Agricultural use (Leasehold or Occupancy)
The fee is 50% of the current market value
4) For land originally granted for commercial or industrial use (Leasehold or Occupancy)
The Nazrana is 50% of the current market value
The conversion process is handled by the District Collector, who calculates the exact fee
Apply procedure for conversion of Satta Prakar B to Satta Prakar A property
1) Submit an Application
You must apply to the District Collector’s office for the conversion of your Satta Prakar B Property
2) Assessment
The collector’s office will review your application and assess the required Nazrana based on lands ready reckoner rate
3) Payment
You will be notified of the Nazrana amount
Once paid, the government issues an order approving the conversion
4) Final Order
After the payment is made, a final order is issued to change the land from Satta Prakar B to Satta Prakar A
Consequence of Non-payment of Nazrana in Maharashtra
The penalties for non-payment of Nazrana and proceeding with unauthorised NA use are outlined in MLRC, 1966
These penalties may include
1) Payment of arrears and fine
The Collector can regularise the unauthrized use, but only after the land owner pays all outstanding NA taxes for the entire period of unauthrized use, along with a fine
2) Forty times the NA assessment
The fine can be up to 40 times the NA assessment applicable to the property
3) Order to Stop Use
The Collector has the authority to issue a notice to stop the unauthrized use of the land
4) Land resumption
In extreme cases, and if the regularization is not possible, the land may be taken back by the government
The land will be sold in open auction, and the original owner may only receive the original price they paid for the land
5) No transfer without permission
A landowner with Class II status can not legally transfer or sell the land without first obtaining the Collector’s permission and paying the necessary premium
