Buying A Flat In Maharashtra Now A Dying Dream

Bangalore: Currently the property prices in Maharashtra are sky rocketing and have become unaffordable for most of the potential home buyers. However, the prices are expected to go higher than the existing prices if the state government comes up with their plan to increase ready reckoner (RR) rates for properties. The Maharashtra government is planning to increase the rates between 5 percent and 30 percent, depending on the location and size of the property.

The reason behind the sluggish real estate market in Maharashtra are increase in cost of construction and challenges faced by developers to get project approvals, which further led to less supply, no such price correction and less sales. Lately, city-based property developers have put forward their request to government to reduce the RR rates which will affect home sales as well as scare away potential buyers from home buying due to unaffordable property prices.

"It's not a good move. Industry is already going through a bad patch and we were seeking support from the government. Increase in costs will be passed on to consumers leading to higher property prices and sales volume is expected to take a hit," said Paras Gundecha, President of realtor's body, MCHI-CREDAI, reports Economic Times.

A RR rate is used to calculate taxes for a particular location that includes stamp duty and registration charges for property transaction. The government is coming up with this measure to generate more revenues on stamp duty in order to boost state’s capital. During 2011-12, the state has collected more than 14,000 crore revenues on stamp duty from property transactions which were bit higher than the revenues collected during 2012-11.

Moreover, the increase in RR rates will come into effect from January this year. While, several developers have requested to the state not to increase the rates further as the market is witnessing sluggish growth and it will also affect home buyers from property buying due to unaffordable prices, according to Revenue Ministry Officials, reports Economic Times.