Article from ET Realty
MUMBAI: The Maharashtra government has offered some cheer to home-buyers in the state by deferring the decision to revise ready reckoner rates to March 31. The ready reckoner rates, henceforth, will be revised as on April 1 and not on January 1, said two state government officials.
“As of now, there is no change and current ready reckoner rates will continue across Maharashtra. We have received a notification about an amendment in The Bombay Stamp (Determination of True Market Value of Property) Rules, 1995,” said one of the officials mentioned above. The decision has been taken to align the changes in the rates, if any, with the government’s tax revenue targets for the financial year instead of the current practice of following the calendar year.
The move has provided prospective home-buyers a window of three months if any revision takes place in these rates later. According to industry experts, the government has taken the decision in the backdrop of current sluggish property market and any hike in these rates would have resulted in further dip in demand. In the year gone by, developers have already started offering direct and indirect discounts in many projects across Mumbai to attract the elusive consumers and prices were expected to soften further from here.
“Aligning the revision in ready reckoner rates to financial year makes sense. We hope the government will consider home-buyers’ interest even after three months while deciding on any revision. Taxes have already reached a level where it could not be absorbed any further,” said Dharmesh Jain, president of MCHI-CREDAI.
Jain added that currently 2842% of sale value of properties comprises of taxes levied by urban bodies, civic authorities and state government.
Ready reckoner rates are used as a basis to calculate the market value of properties for paying stamp duty and registration charges to the state government at the time of registering the transaction. These rates are based on built-up area since 2008, while it used to be based on carpet area earlier.
Apart from sales tax, excise and value-added tax, stamp duty and registration charges are major sources of revenue for the government. Any upward revision in ready reckoner rates will result in residential prices moving higher as the developers are expected to pay higher premium to the municipal authority for projects for seeking extra floor space index within the permitted limits. The government had hiked ready reckoner rates by up to 20% and 30% for 2014 and 2013, respectively.