MUMBAI: The state government must review its latest ready reckoner (RR) rates, which is used to calculate market value of properties for payment of stamp duty and registration charges.
No doubt, stamp duty collection is one of the biggest money spinners for the Maharashtra government. But for the real estate industry and people who want to buy or sell flats, the annual hike in RR rates can be extremely painful.
This year, the government hiked the rates by 20%, leading to protests from the public. India's leading commercial business district Nariman Point has been badly hit due to this.
RR rates for Nariman Point have been fixed at Rs 43,000 a sq ft when the prevailing market rate ranges between Rs 26,000 and Rs 30,000 a sq ft. This illogical increase could kill the office transaction market in the business district and spell trouble for buyers and sellers as they can be accused of deliberately undervaluing property and carrying out black money transaction.
Another enclave which has been affected is the ancient Mahalaxmi temple complex. The RR rates in the precinct are three to four times the actual saleable value of property. The revised rate, introduced last month, is 10% more than that fixed in 2013.
The government should fix a more realistic rates in the future.