Mumbai

Ready reckoner won't allow realty rates to be lowered

5:09 PM

'Ready reckoner won't allow realty rates to be lowered'


Keeping in mind the lull in the realty market, even if the builders want to reduce the exorbitant prices of houses, they will not be able to do so thanks to the recent hike in ready reckoner (RR) rates.

The reason a builder cannot sell his apartment to a buyer below the RR, which reduces the scope of lowering the rates. In addition, the costs are bound to increase further, as all the premiums and taxes on construction activities are directly linked to the RR.

This was revealed in a research paper submitted to the state revenue ministry by Liases Foras, a real estate research firm. "The government has created a situation where the builder cannot charge less. The builder will face problems with the Income Tax department if he tweaks the RR rates," said Pankaj Kapoor, CEO, Liases Foras.

The RR is a rate card that is published annually and determines the stamp duty on a property. The state government hiked the RR by approximately 15% this year, applicable from January 1. However, according to housing activists, the entire load of the hike will ultimately be passed on to the consumers. "The government is making it difficult to buy houses by loading it with multiple taxes. The homebuyers have to bear the brunt of both direct and indirect taxation," said Ramesh Prabhu, head of the Maharashtra Societies Welfare Association.

Builders, too, expressed their disapproval. "The premiums and taxes have increased exponentially and we are unable to reduce the prices," said Bhavesh Sanghrajka, chairman and managing director, Shraddha Lifescapes.

The government, however, defended the hike. "We want to limit black money and as market rates are still higher than RR, builders can still reduce the prices," said a senior official, registration and stamp department.



*** WHAT IS READY RECKONER?

The ready reckoner (RR) is an annual guide published by the state government that determines the rate of the property in a particular area on which the stamp duty and registration charges are levied. Moreover, the premiums charged on FSI, open space deficiency areas as well as other payments are also determined on basis of RR.


by Naresh Kamath for the Hindustan Times

You Might Also Like

0 comments