Increase in rate of ready reckoner anti-middle class: CREDAI Pune

Almost 50% of projects in Pune to be impacted by this increase

The Confederation of Real Estate Developers' Association of India (CREDAI) Pune and Maharashtra termed the recent changes to the ready reckoner by the State Government as anti-middle class.

In a press meet in Pune today, the association asked the government to roll back these increases and leave the 2013 ready reckoner rates and valuation foot notes untouched on account of the current market conditions.

"The government say that the increase in the ready reckoner rates is between 5-10 per cent is untrue. Because in some areas this increase is almost 20 per cent. But more importantly, this time the ready reckoner has added some foot-notes about the way the calculations of land value is done. In some cases it is upwards of 40 per cent," said Rohit Gera, VP CREDAI.

According to Gera this increase will impact almost 50 per cent of projects in the city irrespective of the fact whether these are affordable housing projects or otherwise.

“The ready reckoner was calculated by taking the average rate of any locality. The definition of average means, some prices will be below and some above the average. The system is so anti affordable housing that the lower the flat price, the higher the rate of stamp duty. The lower priced homes will be even more unaffordable for the common man. If affordability is affected, this will be a disincentive for developers to build these homes,” said CREDAI Pune Metro President Hemant Naiknavare.

In addition to increases in the basic ready reckoner rates, the new changes will also have impact on other things like valuations and other taxes.

“The government has changed the basis of valuation of land – where there is a potential to incorporate TDR on the land, the stamp duty to be paid is increased by 40 per cent. For projects which are more than one acre, where amenities such as a club house or pool or gym are provided, the valuation is increased by 15 per cent.  Further, height based increase in stamp duty is also seen an increase of 5 to 15 per cent depending on the height of the building. JV agreements between the developers or with the Land owners also attracts huge stamp duty,” said CREDAI.  

So far CREDAI is focusing on creating awareness among the buyers. "Post this we will take this issue with the revenue minister and the Chief Minister. If this does not work, we may have to look at some legal course as well," added Gera.