Now, the current news in real estate property in Maharashtra is about to Ready Reckoner Rates.
Before reading current news, know about the “Ready Reckoner Rates”?
What are Ready Reckoner Rates?
A Ready Reckoner Rate (RRR) is the standard value of an immovable property that is assessed and regulated by the state government in which it is located. “Immovable property” refers to residential, commercial, and land/plot properties.
What is the role of RRR in real estate transactions?
While the RRR establishes the properties lowest selling price, there is no limit on the property’s maximum price or market rate. By definition, the market rate is the final amount a buyer decides to pay for a property after considering the amenities and past property sales in the area. The majority of properties in India are sold at market pricing, which is usually more than the RRR. As a result, buyers wind up paying more.
However, it has been noticed that changing the circle rates quarterly or bi-annually ensures parity between the market and circle rates. As a result, state governments should review the circle rates regularly.
The Pune builders request that the government raise Ready Reckoner Rates this year. It affects the life of middle-class property developers because if the rate increases, then fewer people show their interest in buying a property.
The administration attempts to determine how the Ready Reckoner (RR) rate has changed. The property registration department has begun discussing revising the Ready Reckoner (RR) tariffs by division, issued every April. The rates were not changed as a result of the outbreak last year. However, the rates released in September 2020 were slightly higher (1.74 percent).
The state budget session approaches:
Developers have stated that increasing the reckoner rates will further increase the price, putting buyers at a disadvantage. Meanwhile, the registration department has confirmed that no such plan has been developed as of now, disputing claims of a potential rise in RR rates.
The real estate developers are still recovering from the effects of the pandemic. It would be unwise to raise the ready reckoner (RR) rates in such a situation. In the last 18 months, construction costs have risen by around 25%. An increase in RR will raise the price even more.
The most recent increase in RR rates was announced in September 2020, when property prices across the state increased by an average of 1.74 percent. However, the government did not change the tariffs in 2018-19 and 2019-20 due to the slump in the building industry.
It is a decision that is decided at the state level, and it will apply to every district,” a senior official from the Pune Division of the Department of Town Planning and Valuation said, seeking anonymity. When a decision is made, the IGR office will announce it. As a result, people should refrain from speculating. The evaluation procedure is underway. After that, the state government will make the final choice.
RR rates are far higher than market rates in many instances, necessitating fast action. In addition, rising RR rates will raise premiums, making homes more expensive. Many affordable housing developers are selling below the RR. So far, a Covid relief of 20% has been allowed for trades below the RR price.
Houses in the inexpensive class will be more expensive now that the concession has been removed. However, the state government’s prompt and necessary action will assist the real estate builders in Pune and the average home buyer, particularly in the affordable category.
What builders hope from the government?
The real estate builders hope for some relief in the upcoming Budget session. They have asked the government to keep raw material costs under control, grant GST input tax credits, and increase financial availability.