MUMBAI: The state government is likely to hike the ready reckoner (RR) rate of properties from the new financial year after a pandemic-induced gap of three years. The department of registration and stamps is expected to recommend a hike of five to 10 percent but the final decision will be taken by the government after the elections.
The department has started gathering data on the sale of properties in various districts in the ongoing financial year. Based on this, the decision on the hike in the RR rates, which vary from district to district and city to city, will be finalised.
The RR rate is the price of property area-wise as determined by the government—sales below this rate are not permitted for registration of the property. Property owners have to pay stamp duty on the basis of the RR rates.
The realty market has been witnessing a boom after a two-year slack on account of Covid-19, and a hike in rates is imperative from the new financial year, according to officials. They, however, pointed out that the government might not implement it since the new financial year has two major elections back to back. “We had proposed a rise of eight to 10 percent last year, but the state government decided against it,” said a senior official from the revenue department. “FY 2024-25 is an election year, and any hike in the RR rate will badly affect sentiments in the real estate market. Thus, it will be a purely political decision even though we have proposed the hike.”
The state government has, till November end, mopped up 67.90 percent ( ₹30,553 crore) of the 2023 target revenue of ₹45,000 crore from stamp duty and registration. It has been better than GST revenue and will cross the target if the trend continues in the remaining period of FY 2024, according to officers from the department. The hike in RR rates helps the government earn revenue—the higher the percentage hike, the higher the money in its coffers.
{{/usCountry}}The state government has, till November end, mopped up 67.90 percent ( ₹30,553 crore) of the 2023 target revenue of ₹45,000 crore from stamp duty and registration. It has been better than GST revenue and will cross the target if the trend continues in the remaining period of FY 2024, according to officers from the department. The hike in RR rates helps the government earn revenue—the higher the percentage hike, the higher the money in its coffers.
{{/usCountry}}The officer quoted above said that during the Covid-19 pandemic in 2020 and 2021, the stamp duty rate was lowered, which helped in keeping the momentum going in the real estate market. “It picked up rapidly after Covid-19 receded,” he said. “Any hike in the RR rate will again hit the sentiment of the market, and the government will have to take this into consideration.”
Hiralal Sonawane, inspector-general of registration and stamps, said it was a routine process which had started this year too. “The final decision will be taken by the government on March 31,” he said.