Pune: According to a State government notification, the ready reckoner rates in the State will see no increase this year, after seeing the lowest increase in reckoner rates last year. The construction industry is calling this decision historic and important. Industry experts say this will benefit in lowering real estate rates.

“Ready reckoner rates are decided based on assessments of property value by the State government. On the basis of this rate, the stamp duty and registration charges are decided,” said Shantilal Kataria, President of Confederation of Real Estate Developers’ Associations of India (CREDAI). He said that the system of calculating the rates was not proper. He said, “The way in which the government has been calculating the rates is highly unscientific and non-transparent.”

Welcoming the decision, developer Satish Magar said, “This is a very good decision. The reckoner had pushed the prices of real estate upwards. After the problems of last year, it is a relief,” adding, “I would now go a bit further and say that the government should reduce the reckoner rates further for affordable housing projects.”

“CREDAI Maharashtra congratulates the government for keeping the same ASR rates of the year 2017/18 for the year 2018/19,” the official statement of CREDAI said. CREDAI has also mentioned that the Maharashtra government, for the first time in eight years, has not changed the indicative prices of properties in the ready reckoner. “In 2009, the then revenue minister Late Shri Patangraoji Kadam took the same decision,” the statement said.

CREDAI also urged the government to make the system more transparent. “Now, with a new provision incorporated by way of amendment in Stamp Act, the government can even reduce ASR rates. They should search such transactions where ASR rates are still unnecessarily more than real transactions and reduce the same by applying new provisions of the act,” the statement said, adding, “To further increase stability and boost confidence amongst property buyers, we urge the government to change ASR rates once in three years only.”

What are Ready Reckoner Rates and what they mean for home buyers?

What are Ready Reckoner rates?

These rates are the prices of the residential property, land or commercial property for a given area and is published and regulated by the respective state government. These rates are regularly revised on a yearly basis depending on the perception about the government for such price revisions.

Therefore, a homeowner or buyer would be required to pay the stamp duty or registration amount, not below such stated ready reckoner rates or the actual price of the property, whichever is higher.

Example – A house property in a certain area has a ready reckoner rate of Rs. 50 lakhs, while the builder has demanded the price of Rs. 60 lakhs. In this case, a homebuyer would have to pay stamp duty on Rs. 60 lakhs only, as it being a higher price.

How Ready Reckoner rates are important for home buyers?

In short, the ready reckoner rates are nothing but fair value price for a property set by the state government, where the builders have the freedom to charge premium over and above such rates. Clearly, it shows that a person will have to pay a value much higher to own a house over and above the reckoner rates. Therefore, if a state government revises such rates then it means that a home buyer would have to pay more than before. The ready reckoner rates serve as the biggest revenue source to the state governments. For instance, the Maharashtra State government has recently declared to hike ready reckoner rates, which will make properties altogether very expensive for buyers.