What is the difference between Agricultural VS Non-Agricultural Land?

What is the difference between Agricultural VS Non-Agricultural Land?

Property investment is one of the well-known investment options which generate better returns with the finite time frame. It is very difficult to get larger land within cities, but one can easily find it in suburbs surrounding the city. So before investing in any plot, one must understand types of land he is investing in. Generally speaking, there are three types of land:

  1. Agricultural Land:
    Agricultural Land is also known as Green Zone (G-Zone). As the name implies it is solely for the agricultural purpose, hence also known as farmland or cropland. As per Maharashtra government, buying an agricultural land less than 11,000 sq.ft. is considered as illegal and therefore no sale-deed or 7/12 extract will be issued for land below 11,000 sq.ft. One can only utilize 0.04% of the area for construction in agricultural land. Any extension over it will be flagged as illegal construction for this type of land.
  2. Non-Agricultural Land or N.A. Plot:
    This type of land is broadly known as urban zone, Industrial zone, recreational zone & residential zone or R-zone. To carry any development in green zone one must convert agricultural land to non-agricultural Land. To make such provision one must avail an N.A. certificate form collector office. After availing N.A. certificate, it becomes easier to receive permission for construction from the local governing bodies.
  3. Forest Land (Forest Zone)
    This particular land type is under statutory of government and is reserved for the forest.

Investing in land is a very crucial decision which demands a better understanding of all aspects. To become a legal owner of the property one must gather complete information about the land one is investing in.

Below is a provisional checklist that may be followed to avoid any negative consequences:

  1. 7/12 extract:
    It is one of the legal document which depicts the information like Survey No. of the land, Name of the Owner, the area of the land, the type of land & type of cultivation. This document is issued by the revenue department and it has information about owner, property & survey number.
  2. FSI:
    It is widely known as Floor Space Index. It is nothing but ratio specified by the government for the development of this particular land. This ratio varies as per the type of the land. The FSI for agricultural land is 0.04 in Maharashtra.
  3. Construction Right:
    Before commencing construction on N.A. plot one must acquire construction rights from the local authorities. As discussed earlier it is easier to receive permission for the N.A. plots as opposed to Agricultural Land.
  4. Loan availability:
    Loan for an agricultural plot is not provided by any bank, But one may avail a loan from any bank if investing in N.A. plots.
  5. Open Space
    As per government norms while developing property on N.A. plot one must maintain approximately 35%-40% open space. However, it’s not applicable to an agricultural plot, where construction is restricted.
  6. Area Deduction:
    For non-agricultural land, there is no area deduction. whereas it may be applied to agricultural land in cases like road development.
  7. Society Formation:
    Society formation is possible in N.A. plots. Whereas in case of agricultural land 99% it is not possible.
  8. Revised layout:
    One can easily revise the planned layout whenever required in N.A. plots.
  9. Returns:
    If one is looking for an investment purpose then one must opt for N.A. plots as they have higher potential for returns. Also, resale value for agricultural land is comparatively low.
    Agricultural land is specifically for the agricultural purpose. It may also be coupled with numerous shortcomings or violations of government act that one may face while investing in an agricultural plot, which is less than 11,000 sq.ft.
    On other hand, N.A. plots are considered as a tension-free investment which generates better returns. Additionally, one may undertake correct development and give a boost to his investment.
    Undoubtedly N.A. plot is the best option to generate better returns, but it can also be the vacation gateway where you can build second home which rejuvenates the mind when in need to get away from a stressful lifestyle.

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