Maharashtra Government Likely to Increase Ready Reckoner Rates by 10%; Real Estate Sector Urges Caution
The Maharashtra government is considering a 10% hike in the Ready Reckoner (RR) rate, the state’s benchmark for property valuation. Real estate stakeholders are raising concerns over the potential impact on housing affordability and market dynamics.
Ready Reckoner RatesReal EstateMaharashtraProperty ValuationStamp DutyReal EstateJan 29, 2025
This revision, which could come into effect from April 1, is aimed at boosting the state's revenue through increased stamp duty collection.
However, the real estate sector is voicing its concerns about the impact on housing affordability and market dynamics.
Sources suggest that discussions between the finance and revenue departments have set the stage for this revision.
The move is intended to align property valuations with existing market conditions and enhance the state’s revenue base.
Dr.
Niranjan Hiranandani, Chairman of NAREDCO, highlighted the long-standing disparity between RR rates and market rates.
“Market rates fluctuate based on demand, location, and economic conditions, which RR rates often fail to capture accurately.
The increase in ready reckoner rates will add to the financial burden of both developers and homebuyers, especially in an already competitive market.
While the revision will boost stamp duty revenues for the government, it could further discourage the development of affordable housing.
A balanced approach is crucial to ensure sustainable growth in the real estate sector,” he stated.
NAREDCO Maharashtra President Prashant Sharma echoed similar concerns, emphasizing the need for a gradual revision.
“The anticipated upward revision of RR rates after three years will have significant implications for the real estate sector, which plays a vital role in Maharashtra’s economy.
An increase in RR rates will directly affect transaction costs, including stamp duty and registration charges, potentially discouraging property purchases and impacting housing affordability,” Sharma explained.
He further called for a collaborative approach with industry stakeholders to ensure that any increase reflects ground realities such as market demand, regional price variations, and ongoing infrastructure development.
“We recommend that any hike in RR rates be complemented by measures like reduced stamp duty rates or incentivized housing policies to sustain the momentum in the sector and support homebuyers,” he added.
Amit Jain, CMD of Arkade Developers Limited, noted that the proposed 10% hike in RR rates could increase Maharashtra’s stamp duty revenue to ₹75,000 crores by March 2026.
“While this move is expected to boost state revenue, it will also raise stamp duty costs, affecting affordability.
The gap between RR rates and market rates exists due to different valuation methods.
While RR rates are revised annually, market prices change daily based on demand and supply.
The upcoming hike aims to bridge this gap and align valuations with market trends,” Jain stated.
Developers are also preparing for increased financial burdens.
Rohan Khatau, Director of CCI Projects, pointed out that rising RR rates will lead to higher costs for developers through increased premiums, stamp duty, and taxation.
“While the market has been witnessing steady momentum, this adjustment may necessitate a short-term recalibration of pricing strategies.
Developers will need to prioritize cost efficiency and explore innovative financial models to sustain demand,” he said.
The expected revision in ready reckoner rates underscores the state’s efforts to align property valuations with prevailing market conditions while boosting its revenue base.
However, industry experts caution that without a measured approach, the increase could dampen housing affordability and market sentiment.
As discussions continue, all eyes are on the government’s final decision and whether it will strike a balance between fiscal interests and the sustainability of the real estate sector.
Information
NAREDCO, the National Real Estate Development Council, is a non-profit organization representing the real estate development industry in India.
It plays a crucial role in advocating for policies that promote sustainable growth in the real estate sector.
CCI Projects is a leading real estate developer in Maharashtra, known for its innovative projects and commitment to sustainable development.
The company works closely with industry stakeholders to ensure that regulatory changes do not adversely affect market dynamics.
Arkade Developers Limited is a renowned real estate development company based in Maharashtra, specializing in residential and commercial projects.
The company is committed to delivering high-quality, sustainable, and affordable housing solutions to its customers.
Frequently Asked Questions
What is the Ready Reckoner rate?
The Ready Reckoner (RR) rate is the state’s benchmark for property valuation used to calculate stamp duty and registration charges. It is revised annually to align with market conditions.
Why is the Maharashtra government considering a 10% hike in RR rates?
The hike is aimed at boosting the state's revenue through increased stamp duty collection and aligning property valuations with prevailing market conditions.
What are the concerns raised by the real estate sector?
The sector is concerned that the increase in RR rates will raise costs for developers and homebuyers, potentially affecting housing affordability and market dynamics.
How could the increase in RR rates impact affordable housing?
The increase in RR rates could make it more expensive for developers to build and sell affordable housing, potentially disincentivizing such projects.
What measures do industry experts recommend to mitigate the impact of the RR rate hike?
Experts recommend a gradual revision, reduced stamp duty rates, and incentivized housing policies to support homebuyers and sustain the momentum in the sector.
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