by THO
In a move that could bring relief to homebuyers, the Maharashtra government just before the auspicious Gudi Padwa, has decided to keep the ready reckoner (RR) rates in the state for FY 2024-25 unchanged. This means that home buyers will not see any increase in property prices due to ready reckoner rates for a year.
The state government announced on March 31 that the ready reckoner rates will remain unchanged for the financial year 2024-2025.
What are ready reckoner rates?
Ready reckoner rates are the benchmark values of real estate. These are used for both, calculation of capital gains under income tax and for determining the stamp duty and registration charges that need to be paid by the buyer to the state government.
These are linked to all premiums and charges, floor space index (FSI) rates payable to municipal corporations. The rates are released at the beginning of the financial year in Maharashtra.
These are also known as the ‘circle rate’ or ‘guidance value’ in other parts of the country. The rates vary from one area to another, and within an area, they may differ for different types of properties, such as residential, commercial, and industrial.
Move to stimulate real estate demand
The real estate sector lauded the state government’s decision.
Domnic Romell, president of CREDAI-MCHI, the apex body of real estate sector of Mumbai Metropolitan Region (MMR), said that the move will provide relief to homebuyers, home seekers, and the real estate sector at large. “This decision promotes stability and encourages investment, fostering a conducive environment for growth,” he said.
Also Read: Mumbai is now among the world’s top 10 luxury real estate markets: Knight Frank Wealth Report 2024
“For home buyers, stability in these rates means greater predictability in property prices, allowing them to plan their investments with more confidence. Additionally, stable rates can stimulate demand in the real estate market. When buyers perceive prices as stable, they are more likely to enter the market, leading to increased sales and transactions. This, in turn, benefits developers and other stakeholders in the real estate sector by maintaining a steady flow of revenue and business activity,” he said.
“This is a positive step taken by the government which will help improve market sentiments and boost the property market. This will help sustain the growth momentum,” said Prashant Sharma, president, NAREDCO Maharashtra.
Also Read: Mumbai records over 14,400 property sale registrations in March 2024, up 10% YoY
The latest ANAROCK data shows that Pune and MMR – the two major Maharashtrian real estate markets – together accounted for 51% of the total housing sales. Pune saw approximately 22,990 units sold in the quarter, increasing by 15% over Q1 2023 when approximately 19,920 units were sold, while MMR saw the highest housing sales of approximately 42,920 units in Q1 2024, increasing by 24% over Q1 2023.
“Sentiment has been consistently high in these cities since the pandemic, with the major focus in Pune being on larger configurations and luxury homes. There is a distinct Fear Of Missing Out (FOMO) element to this demand, as property prices are rising in these markets,” said Aditi Watve, City Head – Pune, ANAROCK Group.
This demand environment will benefit significantly from steady Ready Reckoner rates, which affect the price of acquisition. From the point of revenue to the exchequer coming from property registrations, healthy sales volumes are an important factor, she added.
