Buying and developing properties in Mumbai, the country’s most expensive real estate market, is all set to become even costlier. The Maharashtra government has decided to increase ready reckoner rates by an average 8 to 10 per cent from April 1 onwards. For some residential pockets in Mumbai, said sources, the hike could be up to 25 per cent.
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.
Sources, however, confirmed that the government might just arrest the hike in commercial belts across Mumbai.
“The demand for commercial properties has been on the decline. This is due to several factors including high land rates and rise of online business platforms,” said a senior official, who did not wish to be named.
The media had earlier reported that commercial belts such as Colaba, Bhuleshwar, P D’Mello Road, S V Road (Bandra), Chakala and Kurla had in 2015 witnessed property transactions at rates which were even lower than the prevalent RR rates. Sources confirmed that the negative trend for transactions in commercial belts was discussed during a recent meeting with Revenue Minister Eknath Khadse.
The move to hike RR rates will also diversely impact the construction cost for builders as several charges collected by the Brihanmumbai Municipal Corporation (BMC) are directly linked to the RR values. Government sources confirmed that the worst hit would be buyers of the properties being redeveloped. Property tax computations too are linked to RR rates.
With the country’s real estate market in the grip of a two-year downturn, the builders’ lobby and legislators, including those from the BJP, had demanded that the government should not hike RR rates this year. Following this, the Devendra Fadnavis government had in December deferred the hike plans until April 1. It had readied a proposal for a similar moderate hike even then.
Sources also confirmed that there hadn’t been any noticeable change in the trend of property transactions over the last three months. With the stamp and registration fee being the second biggest revenue earner for the state, the government has decided to continue with the moderate hike. For 2016-17, the government has anticipated a collection of Rs 23,548 crore from stamps and registration fee.
Credits Indian Express