State govt increases RR rates by 7 per cent making properties more expensive

By Accommodation Times News Services

PropertyFinally the state registration and stamps department announced the ready reckoner rates for the state of Maharashtra were announced on March 31st in evening with a hike of 7 per cent at an average all over the state for the year 2016-17. The new increased rates are applicable from today April 1st.

The rates in the different areas are increased as follows, the rates in rural areas are been hiked by 8 per cent, while 7 per cent in influential areas, 7 per cent in municipal council and nagar panchayat limits, 5 per cent in municipal corporations areas.

The RR rates are market values of a property determined by the government for payment of stamp duty in the course of property transactions.

The state revenue minister Eknath Khadse made announcement in this regard in the state assembly saying that the government took the conscious decision not to increase RR rates steeply considering the slump in the economy and the sluggish mood especially in the realty sector.

During the announcement justifying the hike Khadse said, “The moderate hike was passed on considering the drought crisis faced by the state and taking into account actual property transactions recorded in 2015.”

It is expected the state registration and stamps department will collect revenue of around Rs 15,000 crore, with the increase in rates. Unlike every year this year government postponed the date of revision in the rates from January 1st to April 1st on request of the developers, as property market is sluggish and less sales is witnessed. The developers had also applied to the state government not to have a heavy hike on RR rates.

Many industry people are not happy with the increase in rates, as the property market is down and the property rates are falling. As per the industry experts the increase in rates will make home buyers think twice before buying a home.

As home buyers have to pay stamp duty equivalent to 5 per cent of the RR value or 5 per cent of the actual property value as mentioned in the sale agreement, whichever is more. Property tax computations are also linked to RR rates.

Mr. Rohit Gera, MD, Gera Developments & VP, CREDAI, Pune Metro, disappointed with government’s move said, The increase in the ready reckoner rates is not at all in line with the market conditions. Over the years, the price rise has been under 1%. This is an example of the government’s words and actions being out of sync. On one hand there is a statement to provide housing for all, on the other hand this move makes it more expensive for home buyers by increasing their Stamp Duty costs. The ready reckoner is set by looking at average rates in a location. This means there will be some flats below average and some above. The ones below average are generally the affordable homes at lower prices. These buyers are forced to pay Stamp Duty at higher rates.”

Ms. Manju Yagnik, Vice Chairperson, Nahar Group, too was upset with Ready Reckoner rate hike, she said, “The RR rate increase will impact the entire construction sector with end consumers paying more for his dream home. This increase has a cascading effect across the sector with increase in land cost and construction expenses – including cost of TDR to be purchased and premiums paid to civic authorities for FSI. Stamp duty and registration charges, will also go up which will result in homes getting dearer for the home buyer.The impact will be the most in the Eastern suburbs as the increase is the highest there. Also the redevelopment projects will be worse affected.”

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