The Maharashtra government may introduce a 10% rise in Ready Reckoner Rates (RRR) effective from April 1, 2025. This adjustment, proposed by all districts following discussions with relevant parties, is intended to enhance state earnings, as per news reports.
The proposed 10% increase in Mumbai's Ready Reckoner Rates, set for April 1, 2025, will raise the minimum property valuation, directly increasing stamp duty and property prices, affecting buyers, investors, and developers. The stamp duty, a one-time tax on property transactions in India, varies by location and property type, with higher rates in urban areas like Mumbai, impacting the cost of real estate deals.
Senior government officials have reportedly said that the ultimate verdict rests with the state government.
Real Estate expert Ravi Kewalramani on Wednesday said buyers may see a potential increase in property costs, while alerting investors that new pricing changes could have an impact on market demand and return on investment. He added that the developers should be mindful of potential increases in redevelopment and project costs that may arise.
"The Maharashtra government is considering a 10% increase in Ready Reckoner Rates (RRR) starting April 1, 2025! 👉🏼 What’s Changing? • RRR, which sets the minimum property valuation, last increased in 2022. • Higher RRR = Higher stamp duty & property prices. 👉🏼 Impact on You: • Buyers – Property costs may rise! Consider registering purchases before the hike. • Investors – New pricing could impact market demand & ROI. • Developers – Redevelopment & project costs may increase," Kewalramani wrote on social media platform X.
The Ready Reckoner Rate (RRR) is the lowest price at which a property can be sold in a specific area, also referred to as the circle rate, guidance value, or collector rate. The RRR is determined by factors such as the property's location, size, type, and the prevailing market conditions. It is regularly revised to align with the current market trends and is released on an annual basis by state authorities.
The newly elected Maharashtra government is anticipated to move forward with the increase, despite objections from developers who caution that it may lead to higher property prices and have a negative impact on the real estate industry.
Last month, the Confederation of Real Estate Developers' Associations of India (CREDAI) reportedly encouraged the government to rethink the hike, citing potential adverse effects on the housing sector. Developers argue that even though the last adjustment was in 2022, the existing rates are already elevated, and a further increase could discourage property investments.
Maharashtra govt and stamp duty collection
The Maharashtra government is projected to generate a total of Rs 55,000 crore through stamp duty collection in the current fiscal year. In addition, an estimated Rs 15,000 crore to Rs 20,000 crore is expected to be generated from the recent hike in Ready Reckoner (RR) rates. Stamp duty and real estate registration currently rank as the third-highest sources of income for the state, following GST and sales tax.
Earlier, government officials have indicated that the implementation of various populist schemes, such as the Ladki Bahin initiative, has put significant financial strain on the state, necessitating the exploration of additional revenue sources. Despite some apprehension from the real estate industry, authorities assert that the RR rate hike was long overdue, as the rates had remained unchanged for a period of three years due to various factors including election cycles and economic conditions.