The Maharashtra state government has hiked the Ready Reckoner (RR) rates for the year 2016-17, with the new rates applicable from 1st of April. An important source of revenue for the government, the hike can influence property and project prices in the region. Here are the highlights of the government’s announcement.

· RR rates are the market value of the property as determined by the government and is used to determine the stamp duty and registration charges levied on property transactions. The state of Maharashtra earns its second highest revenue from the registration and collection of stamp duty.

· Overall RR rates have been hiked by 7%, nearly half of the 15% hike seen last year. The government calls the hike ‘marginal’ and claims it has taken into account the slowdown in real estate and the ongoing drought.

· Rates have been hiked by 7% in Mumbai, followed by 6% in Thane and 4% in Navi Mumbai. Pune’s RR rates too have been increased by 6%.

· Developers use this to calculate premiums on FSI and development charges, so an increase in rates will result in an increase in project costs.

· RR rates are usually hiked on the 1st of January every year, but the government had delayed the hike due to strong opposition from the builder lobby which felt the hike would scare away customers.

· Developer body MCHI-Credai has stated it will request the government to rollback the hike as it will raise input costs and put pressure on the industry. Real estate experts however are calling the increase in rates acceptable, especially when compared to current inflation rates which stand at 5%.

The Property Team