Mumbai property puzzle: Shah Rukh Khan’s ₹9 crore Mannat refund decoded

Bollywood superstar Shah Rukh Khan is set to receive a ₹9 crore refund from the Maharashtra government following an error in calculating the ownership conversion premium for his iconic sea-facing bungalow, Mannat. The report, first published by Hindustan Times, revealed that the Mumbai suburban collectorate admitted to a miscalculation made during the conversion of the property from leasehold to freehold ownership.

Mannat, classified as a Grade III heritage structure, was acquired by Khan on a 99-year lease in 2001 from the Bai Khorshed Bhanu Sanjana Trust. Heritage laws, which preserve the historical integrity of such properties, prohibit significant structural changes. 

Khan constructed a multi-storey annexe behind the bungalow, which now serves as their primary residence.

In 2019, the Khans converted Mannat from leased property (class 2) to freehold ownership (class 1), paying a premium of ₹27.5 crore. However, according to Satish Bagal, the suburban deputy collector, “The premium was to be paid on the value of the land. Instead, it was calculated on both the land value and construction costs.” Bagal was quoted as saying to HT that this error resulted in an overcharge of ₹9 crore.

The discrepancy was identified in September 2022, prompting Gauri Khan to file an appeal for a refund. The collectorate recently approved the reimbursement. Bagal further stated, “We are awaiting the formal government order, after which we will refund the excess ₹9 crore charged from Shah Rukh Khan.” 

BT, however, could not independently verify the claims made.

What is Grade III heritage structure?

As a Grade III heritage property, Mannat faces stringent restrictions on modifications, requiring any renovations or expansions to be cleared by heritage conservation authorities. Despite these limitations, its location in Bandra Bandstand and cultural significance make it one of Mumbai’s most coveted properties. Reports suggest that the Khans have applied to add two additional floors to the annexe, which, if approved, could enhance the property’s utility and valuation.

How much does Mannat stack up in Mumbai real estate pie?

The estimated value of Mannat stands at approximately ₹200 crore (₹2 billion), reflecting the high property rates in premium locations. In areas like Bandra West, residential properties are priced between ₹33,000 and ₹34,000 per sq ft, while luxury hubs such as Juhu command rates of around ₹56,000 per sq ft.

Comparatively, western and central suburbs see prices ranging from ₹20,000 to ₹50,000 per sq ft. Emerging areas like Thane and Navi Mumbai (including Ulwe, Dronagiri, and Panvel) offer more affordable options, with prices between ₹10,000 and ₹25,000 per sq ft, supported by metro expansions and other infrastructure projects.

With economic recovery, investor confidence, and government initiatives boosting the real estate market, experts predict a 5% rise in Mumbai’s residential property prices over the next year, with areas benefiting from new connectivity seeing higher appreciation rates.



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