PUNE: Senior officials met revenue minister Chandrakant Bawankule on Monday and said later that the state govt is contemplating a 10% increase in Ready Reckoner (RR) rate based on recommendations by all districts after their consultation with stakeholders.
An official, who attended the meeting, told TOI, “Districts have proposed a 10% increase in RR rate. It is being evaluated and Bawankule said the final decision lay with the Maharashtra govt.”
RR rate is the state govt’s assessment of property value, based on which stamp duty and registration charges are levied. The rate is primarily used for valuation of properties. If approved, the new RR rate will take effect from April 1 — the start of financial year 2025-26.
The cash-strapped govt is expected to proceed with the increase despite opposition from developers, who warn it could make properties more expensive and adversely impact the real estate sector. “In our submissions, we have requested the state govt to not increase the rate since it would slow down the sector, which has only now started to pick up pace following the Covid pandemic,” said a state Credai member.
The last RR rate revision was executed in 2022. A developer said it may be three years since an upgrade, but the RR rate is already high and should not be hiked further. “It would increase property price and impact the real estate sector. The govt should also consider the revenue collection, which is above 75%, and maybe think again,” he said. His thought was echoed by a developer who announced about three new projects in Pune city recently.
Experts said the state is expected to earn Rs55,000 crore from stamp duty collection this year and another Rs15,000 crore to Rs20,000 crore from increased RR rate.
Earlier, the revenue department, which deals with stamp duty and registration, had proposed the hike during a presentation to the finance department in early Jan. The proposal was in response to possible options of increasing state revenue. Stamp duty and registration are the third-highest generators of revenue — after GST and sales tax.
Another senior revenue official said, “The state govt did not revise the RR rate for three years because of various reasons — including the two elections last year. The hike is overdue, especially since the govt is in dire need of money after the burden of populist schemes like Ladki Bahin.”
The govt expects a rise in revenue collection with the hike in RR rate and the revenue to cross Rs60,000 crore. The money earned will likely be used to fund schemes.
A registration official said the hike in RR rate could lead to an initial slowdown in registration of properties. However, it will stabilise in a few months. A real estate agent said the RR rate will lead to a hike in property prices and unsold apartments will pile up. “The realty industry generates the highest employment. The govt should consider methods other than RR rate-increase, which will affect the realty market,” he added.
The proposed GIS mapping for realistic RR rate will not be applicable to the current assessment. It has been completed for rural parcels, but not for urban areas. The geospatial data linked with the department will help, however, the work is not complete and can be implemented only from next year, revenue officials said.
RR rate for “value zones” is compiled based on average market rate, local inquiries, documents registered with the department, information from media reports, real estate exhibitions and market intelligence.
“It is a subjective system, throwing up ballpark (rough numerical estimate) figures. The mapping would help give a clear picture,” said a top official of the department of stamps and registration. However, it can be implemented only the next financial year as the work is incomplete.
