Mumbai: As the saying goes the devil is in the details. With the revision in the state’s ready reckoner (RR) rates, the construction cost is set to go up by at least 10%. For Mumbai, the earlier figure of Rs 27,500 per sq metres has now been raised to Rs 30,250 per sq m, while it will jump from Rs 24,000 to Rs 26,620 per sq mt in Thane. In some zones in Mumbai and rest of Maharashtra, the construction cost will soar by more than 20%. The changes are going to further hit the crisis-ridden realty sector, said experts. As per the government guidelines issued after the RR rates came into effect from Saturday, property buyers will end up paying more stamp duty, meaning the price of a flat will be higher by a minimum 10%.
This is despite the government's recent decision to slash stamp duty in two tranches from September to December 2020 – from 5% to 2% – and January to March 2021 – from 5% to 3%. A Revenue Department official told Free Press Journal, "In Mumbai, there has been a .6% cut in RR rates but there has been an average 1.74% rise in the state. In some zones, the RR rates, construction cost and property price will increase while in other zones they may reduce. For example, a flat at Mulund west that earlier cost Rs1.46 crore will now cost Rs 1.61 crore with the new RR rates. This means the price has gone up by Rs 15 lakh. The rise is due to the revision in RR rates, 2% stamp duty (Rs 30,000) and the payment of more income tax on the difference of the agreed value (30% each).’’
Many developers said the government should have continued with the 2019-20 rates because of the economic slowdown and the coronavirus pandemic. A leading builder said before a property buyer could take any decision the state has given a body blow by revising the RR rates. Although the stamp duty for flats was reduced, the RR rates for residential and commercial have been increased.
"The government projected that it was offering relief but in actual terms there will be more pain for the realty players and also for property buyers," he said. Anand Gupta, the chairperson of Housing and RERA Committee, said, "The revision in Ready Recknor rates is most unrealistic as it will not serve any purpose to boost the real estate sector nor encourage property buyers to come forward to do transactions. The government's recent move to reduce stamp duty has been washed away with changes in RR rates."