The Maharashtra government on March 31 decided not to increase the ready reckoner (RR) rates in the state for fiscal 2023-24. In 2022-23, the government had increased the RR rates by an average of 8.80 percent.
The government’s decision not to change the RR rates will help homebuyers in the affordable segment, said real estate developers.
In 2022-23, except Mumbai, the ready reckoner rates of all municipal corporations were increased by 8.8 percent from April 1, 2022. Before 2022-23, the last increase was before the onset of the Covid-19 pandemic, when rates were raised by 5.86 percent in 2017-2018. The rates were stable for two years and increased by 1.74 percent in 2020-2021.
This comes in the backdrop of the meeting of the Monetary Policy Committee of the Reserve Bank of India (RBI) on April 6 where an announcement of an increase in the repo rate is expected. The increase in repo rate directly impacts home loan rates.
What are RR rates?
Ready reckoner rates are the benchmark values of real estate. They are used for both calculation of capital gains for income tax and payment of stamp duty to the state government and are linked to all premiums and charges, and floor space index (FSI) rates payable to municipal corporations. The rates are released at the beginning of the financial year in Maharashtra.
The RR rate, also known as the ‘circle rate’ or ‘guidance value’ in several parts of India, defines the minimum per square foot rate of a property fixed by the state government. According to the law, one cannot sell his or her house at a rate below the RR rate. The RR rate is deemed to be the minimal market rate. But if one sells his or her house at a rate higher than the RR rate, then the buyer’s stamp duty and other charges get linked to that rate.
Developers welcome move
Real estate developers have welcomed the Maharashtra government’s move to not increase the RR rate.
“We had requested the GoM to not increase RR rates taking into account hardships of homebuyers and the sector due to the increase in mortgage rates since the last year and other global factors. Any increase in RR rates would have increased the cost of housing. The unchanged rates will benefit affordable and mid-segment home buyers,” said Keval Valambhia, Chief Operating Officer of CREDAI-MCHI, an apex body of real estate developers.
Also read: Mumbai reports 11.53 percent YoY drop in property registrations in Q4
“The repo rate hike by the RBI had led to an increase in home loan rates, however, this decision by the state government is a welcome move and will help homebuyers in affordable and mid segments the most,” said Hitesh Thakkar, vice president of the National Real Estate Development Council (NAREDCO), another apex body of real estate developers.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
