With the Maharashtra Government hiking the ready reckoner rate by close to four per cent, property prices in the city is likely to head north. This is the lowest hike of ready reckoner rates in last six years.
Reckoner rates are assessments of property value by the State government on the basis of which stamp duty and registration charges are paid. The government usually revises these rates every year.
Industry watchers say that any rise in these levies would increase project costs, which developers will have to recover from customers.
The increase in the ready reckoner rate in Maharashtra will also have an impact on statutory property buying cost such as stamp duty and registration charges. While stamp duty is charged at five per cent of RR, the registration charge stands at one per cent of the total property value.
Incidentally, this year the Government has undertaken a modest hike of 3.95 per cent as against an average of seven per cent every year. The ready reckoner rates was increased to by 13 per cent in 2010, 27 per cent in 2011, 17 per cent in 2012 and 12 per cent in 2013, 13 per cent in 2014, 15 per cent in 2015 and seven per cent in 2016.
Maharashtra Revenue Minister Chandrakant Patil said the new rates will come into force with immediate effect.
Property watchers and industry said that the hike on ready reckoner rate will have an impact on real estate sector and buyer sentiments will further come down. Developers are also bracing to get RERA ready which has come into effect from April 01 in Maharashtra.
Niranajan Hiranandani, Co founder, Hiranandani Group said, “The government should make an effort to reduce it. Last time the government said that it was seven per cent but in reality it was close to 35 per cent. I think the price ideally should not have been increased as hiking it increases the costs to the buyers. Government should bring it down as it keeps talking about affordable housing etc but with this move I think they don’t want prices to come down as they want to do revenue collection”.
Samantak Das, Chief Economist, Knight Frank, “The government’s move comes at a time when buyers are gradually coming back to the market. This is a regressive step as it comes at a time when all other aspects are in favour of the buyers such as low interest rates on home loan, RERA becoming a reality. I think government should have waited at least for a year to see consumer sentiments strengthen”.