Quite recently the rise in the prices of input materials elevated the prices of the Properties in Mumbai and on the 1st of April, the government announced a rise in the ready reckoner rates in various locations of Maharashtra except for Mumbai.
- Thane: 9.48%
- Navi Mumbai: 8.90%
- Ulhasnagar: 9.81%
- Vasai-Virar: 9%
- Panvel: 9.24%
- Pune: 6.12%
- Nashik: 12.15%
- Pimpri-Chinchwad: 12.36%
The rise was not really expected from the government as the real estate sector is still recovering post the three waves of Covid-19. The last incremental in ready reckoner rates in Thane District and other towns was witnessed just before the onset of Covid-19. Since then the ready reckoner rates have been stable for two years 2020 and 2021.
On the rise of ready reckoner rates in Maharashtra, Mr. Abhishek Kiran Gupta, CEO at CRE Matrix was quoted stating, “I am particularly glad that our respected government did not increase the ready reckoner rates in Mumbai city. Our research across all micro-locations in Mumbai city clearly showed that ready reckoner rates were at striking distance when compared to ongoing market rates. In some exceptional cases, the market rates of select micro-locations and select aged properties are actually below ready reckoner rates.”
What are Ready Reckoner Rates?
Ready Reckoner Rates serve as a yardstick value of the real estate as they are used for both, payment of stamp duty to the government authorities and calculating the value of capital gains under the laws of the income tax. The rate is also linked to all the premiums and charges such as rates payable to the municipal corporations and floor space index (FSI).
One of the major pre-requisites of the ready reckoner rate is that the developer or the homebuyer cannot sell the property at a rate below it. In some cases, the condition of just adhering to the legal papers is initiated by the parties involved in the sale and purchase. If the sale price is higher than it, it will have a direct effect on the buyer as his or her charges such as stamp duty are associated with it.
We believe all stakeholders in real estate sector including home buyers will will unhappy with the announced hike in ready reckoner rates for Properties in Maharashtra.
The increase in the input material costs has already negatively affected developers building Affordable Homes in Maharashtra and this move alongside the rise in stamp duty rate from April 1, 2022 will surely be a dampener for sales in the short-term.
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