Realty sop: State set to cut ready reckoner rates

The real estate sector, worst-hit by the economic slump, can expect some relief with the Maharashtra government likely to announce an up to 30 per cent reduction in ready reckoner prices.

The prices are used to charge stamp duty and are calculated on the basis on trends in the property market. They are published by the state government on January 1 every year. This year, for the first time in eight years, the state government did not propose any change in the rates taking into consideration the downward trend in property prices.

However, the state government’s move was criticised by builders, experts and consumer groups who called it an indirect increase in stamp duty. The stamp duty is charged at 5 per cent of the transaction value or the ready reckoner price, whichever is higher.

Speaking with Business Standard, a senior official in the revenue department said, “We received many representations demanding a reduction. After reviewing the transactions in the property market over the last few months, we came to the conclusion that there is a need to reduce ready reckoner prices in Mumbai, Navi Mumbai, Thane and Pune.”

“So a proposal has been prepared to reduce the prices up to 30 per cent based on trends in the property market. This reduction differs from area to area and is not uniform,” he clarified.

Speaking about the effects of the slump in the real estate market on stamp duty collections, he said, “This year, the target was Rs 9,600 crore, but we will feel lucky if we manage to reach the last year’s figure of Rs 8,500 crore.”