Developers predict a rise in home prices after rise in RR rates

By Accommodation Times News Services

Image for property tax Haryana storyMaharashtra government raised the ready reckoner (RR) rates, which will increase the property prices as an increase in registration and stamp duty charges as an effect of hike in RR rates.

The RR rates have gone up by up to 20% in Mumbai, which means outgo of higher stamp duty for home buyers. In Pune, the rates have touched a maximum of 20%.

Developers predict the hike will add a lot of burden on home buyers as all the government-related charges like stamp duty, registration, taxes, etc, that used to account for 12-15% of the cost of an apartment, will now rise to 15-18%. Worse, the Reserve Bank of India (RBI) does not acknowledge these costs in the home loans disbursed to customers. The developers are not pleased with the increase as market is already in slowdown.

“This hike was completely uncalled for. The costs like lease rentals, property taxes, registration charges, stamp duty will only go up leading to further burden on consumers. This sort of hunger to increase revenues by the state government is making consumers suffer. Also, now under section 50C of the Income Tax Act, if a property is being sold below the RR rate, the difference is taxable on both consumer and developer, which will lead to further problems in doing business,” said Lalit Kumar Jain, chairman, Confederation of Real Estate Developers Associations of India (Credai).

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