Mumbai : The Maharashtra government has raised the ready reckoner rates (fair value price for a property set by the state government) by an average of 1.74 per cent across the state, from September 12, 2020. However, the increase in ready reckoner rates in a location where the market rates are higher won’t affect property buyers much.
The decision was made to increase the rates after the state government temporarily reduced stamp duty on registration of housing units by 3 per cent points until December 31, 2020 and by 2 per cent points for the period from January 1, 2021 to March 31, 2021.
Meanwhile, both the supply and the demand side of stakeholders are upset by the decision. According to developers, it will adversely affect the real estate sector, which is already struggling.
The ready reckoner rate is also known as the “circle rate”. It is the minimum rate fixed on per square feet or per square meter of a property by the state government. The ready reckoner rate is said to be the minimal market rate. However, if you sell your house at a rate higher than the ready reckoner rate, then the buyer’s stamp duty and other charges get linked to that rate.
What if market rates are higher than circle rates?
Market rates are typically higher than the circle rates across Maharashtra. As per the recent analysis of the actual transaction values and circle rates of properties in the Mumbai Metropolitan Region (MMR) by Propstack, a real estate intelligence firm, 63 per cent of the transactions took place at a rate of 20 per cent over the ready reckoner rates. The study and its findings were based on 38,000 sale transactions in the MMR for the period April 2019 to March 2020.