Govt announces new ready reckoner rates; Solapur highest, Mumbai second-lowest

The highest rise in the RR rates is in Solapur city (10.17%), followed by Ulhasnagar (9%), Amravati city (8.03%) and Thane city (7.72%). The rise in the RR rates is expected to earn the cash-strapped Maharashtra government a minimum of ₹10,000 crore against the target of ₹63,500 crore from stamp duty and registration in FY 2025-26

MUMBAI: After a gap of two consecutive years, the state government on Monday announced a rise in the ready reckoner (RR) rates across the state for the financial year (FY) 2025-26. Although the average rise in the state remains 3.89%, it is 5.95% in urban areas governed by municipal corporations. It is just 3.39% in Mumbai, the second lowest after Nanded.

Mumbai, India - Sept. 5, 2023: Arial view of Infrastructural development at Sath Raasta, Mahalaxmi, in Mumbai, India, on Tuesday, September 5, 2023. (Photo by Anshuman Poyrekar/ Hindustan Times) (Hindustan Times)

The highest rise in the RR rates is in Solapur city (10.17%), followed by Ulhasnagar (9%), Amravati city (8.03%) and Thane city (7.72%). The rise in the RR rates is expected to earn the cash-strapped Maharashtra government a minimum of ₹10,000 crore against the target of ₹63,500 crore from stamp duty and registration in FY 2025-26.

The government has increased the RR rates separately for rural areas, urban areas, influence areas and nagar panchayat areas, while Mumbai has been treated as a separate zone. The highest hike—5.95%—is in the municipal corporation areas, although the RR rate for Mumbai is just 3.39%. The lowest RR rate is 3.29% for influence areas.

The revision in the RR rates is based on the rates at which properties were sold in the previous year. RR rates are the government’s estimate of what property prices should be although the actual market rates are far higher. These rates form the basis for charging stamp duty for registration of real estate transactions.

The rise in Mumbai is low, as the RR and market rates are almost at par, claimed a revenue department official. “Land deals are rare in Mumbai because of land paucity; the market is dominated by flat sales,” he said. “Most builders in Mumbai do not indulge in cash deals, leading to the RR rates being on par with market rates.”

The official said that the Solapur hike was the highest because of rapid development in the city after the government’s launch of new highways. Navi Mumbai and Thane have seen high rates of transactions over the last few years leading to a sizable rise in the rates.

The rise in the RR rates will lead to a hike in flat prices. The stamp duty in the state ranges between 5% and 7%, and the rise in the rates will attract stamp duty accordingly.

The statement issued by the government says, “While revising the rates, the data on the actual registered transactions is collected village-wise and value zone-wise, and the rates are finalised taking into account increases or decreases in the rate of registrations. We consider suggestions/objections from elected representatives, and new construction rates are obtained from the public works department before finalising the rates.” The last hike in the rate was in FY 2022-23.

“The increase of RR rates by up to 10% is what we were expecting,” said Domnic Romell, President, CREDAI-MCHI, an realty industry association. “The government had not revised the rates for the last five years. It was supportive during the pandemic period when the real estate industry was significantly affected due to the lockdown and related economic conditions.”

Raajesh Prajapati, founder and managing director of the Prajapati Group, said, “For Navi Mumbai, we were anticipating up to 5%, but the actual hike is slightly more at 6.75%. This will have a direct impact on the construction cost as well since land prices will also get revised as will construction or approval cost. Had the hike been within 5%, we would have partially absorbed the same but not in the case of nearly 7%.”

In anticipation of the rise in the RR rates, the registration of properties in the last three months went up, helping the government mop up over ₹58,000 crore from stamp duty and registration against its target of ₹55,000 crore for FY 2024-25.