MUMBAI: Despite falling sales volume due to already unaffordable housing prices, the Maharashtra government has hiked ready reckoner rates by up to 20% in Mumbai, the most expensive property market in the country.
The revision in ready reckoner rates will be applicable from January 1, 2014, said a state government official. A few locations like Nepean Sea Road, Altamount Road, Worli and Prabhadevi have seen a hike of more than 20% and are most affected among the city areas, he added.
The hike has come as a surprise to many. It is being seen as quashing Mumbaikars' hope of price correction in the backdrop of residential property sales volume declining for more than two years owing to hardening interest rates and unaffordable property prices.
In the year gone by, developers have already started offering direct and indirect discounts in many projects across Mumbai to attract the elusive consumers and prices were expected to soften further from here.
The ready reckoner is used as a basis to calculate the market value of properties for paying stamp duty and registration charges to the state government at the time of registering the transaction. The ready reckoner rates are based on built-up area since 2008, before which it used to be based on carpet area.
Apart from sales tax, excise and value-added tax, stamp duty and registration charges are major sources of revenue for the government. The upward revision in ready reckoner rates will result in residential prices moving higher as the developers are expected to pay higher premium to the municipal authority for projects for seeking extra floor space index within the permitted limits. Last year, the government had hiked ready reckoner rates by up to 30% for 2013 as well.