Ready reckoner rates unchanged for third year in Mumbai | Mumbai News

MUMBAI: There will be no change in ready reckoner (RR) rates in the state for the forthcoming financial year. The last time the rates were increased for Mumbai was in 2020-21, by 1.74%.
Fresh RR rates come into force annually from April 1. State revenue minister Radhakrishna Vikhe-Patil on Friday said, “The decision will encourage people to purchase homes as it is beneficial to both the buyer and seller.”

Industry experts, though, slammed the government, saying it would “cause an imbalance in the real estate market and affect the sale and purchase of flats”.
“In seven years, the RR rates have been increased only three times. It no longer reflects market reality, and is hurting the common public. The builder will pay the same premium for additional floor space index, concessions as last year but the common public is finding it hard to buy or sell property,” said Sunit Gupta, a property valuation expert. He said the government will help the common public by ensuring the RR rates reflect the market value or by reducing the stamp duty to be paid on purchase of a property.
Gupta said property prices at Nariman Point, Nepean Sea Road and Pedder Road are lower than RR rates. On the other hand, from Jogeshwari to Borivali, RR rates are nearly 40% lower than market rates.
“The income-tax department does not go by the agreement value rather by the RR rate. If a flat is sold for Rs 4 crore and as per the RR rate the value is Rs 6 crore, it is a difference of Rs 2 crore. It will demand both the buyer and seller to pay IT on the difference. The seller pays 20% as IT and the buyer 30%,” said Gupta.
In suburbs, low RR rates mean low valuation of property against the market rate which sees the loan quantum offered by several banks on the property valuation come down, he said.
Pankaj Kapoor, MD, Liases & Foras, a real estate research agency disagreed. “Except in case of 2-3% of the market, RR rate is actually lower than the market value. From 2016-2022 property prices had not appreciated. The government did not increase the RR rates because it was sensitive to the market. The economic outlook is not very good, interest rates are up, increasing EMI, property prices have increased. Any increase in RR rates will only increase stamp duty. Unsold inventory in MMR has gone up as government reduced premium by 50%. What it has done is very rational.”