Maharashtra Leaves RR Rates Unchanged
In a move to tame property rates, especially in state capital Mumbai, the Maharashtra government on March 31 decided to maintain status quo on ready reckoner (RR) rates, the government permissible price below which a property cannot be bought or sold, for financial year 2019-20 (FY20).
The state government has last hiked RR rates, also known as guidance value and circle rates, in 2017. Buyers have to pay stamp duty, registration charges and other taxes on their property purchases based on the RR rates.
The government move would help Mumbai’s real estate developers, who are struggling to sell the existing housing stock amid rising prices. Last year, the state government increased the cost of property transactions by imposing one per cent surcharge on property purchases. Consequently, stamp duty on property purchases increased to six per cent from the earlier five per cent.
It is worth mention here that Mumbai is one of the most expensive property markets in the world. According to the Economist Intelligence Unit’s Worldwide Cost of Living 2019 index, the Maximum City is the 122nd most expensive property market in the world.
To buy a square metre of land in Mumbai’s Napier Road, for example, one has to pay Rs 475,400. The cost of buying a flat in this locality is Rs 861,000 square metre (psm). In suburban Ghatkopar, too, RR rates are way much higher than in a similar locality in national capital Delhi. To buy an apartment at Ghatkopar, a buyer has to pay minimum Rs 89,400 psm. In Delhi’s suburban Dwarka, the buyer has to pay Rs 46,900 psm.
It is worth mention here that market rate of properties is often much higher than RR rates.
In a scenario such as this, it becomes mandatory for authorities to control prices in Mumbai as the government struggles to chase the housing-for-all-by-2022 target.