 "Pune developers feel hike in ready reckoner will impact sales in 2015")
The ready reckoner (RR) is the base rate of property which determines stamp duty and registration charge collected by the government. In addition, all calculations related to property transactions - stamp duty, registration, premiums and tax collections - are based on ready reckoner rates.
"By substantially increasing valuations, we believe, a backdoor method is being employed and home buyers will be substantially burdened on this account. Credai fears that this move will prove to be self defeating as this will lead to a more than corresponding reduction in the sale of the apartments on account of affordability. At this rate of taxation to the housing sector, the government's dream of a home for every Indian will continue to stay just that - a dream," said a statement by the Confederation of Real Estate Developers Association of India (CREDAI) Pune.
Credai estimates that the basic flat rates in the Pune Metro Region have generally increased by about 7% - 8%, while the land rates have increased by about 5% - 15% in the last year. However in ASR 2015 the apartment rates across the city have been increased by 15-25% and the land rates have been increased by 20% to 100%.
"Additionally, the newly introduced valuation multipliers on account of project plot size and flat sizes in addition to the earlier multipliers/additions on account of floor have a cumulative effect in most cases to further increasing stamp duty payable by an estimated 10%," said Credai.
Most of the developers in Pune were disappointed to see a hike in RR which they feel will impact sales. "A hike in RR rate despite of the slowdown in the sectors comes as a bigger pinch to the realtors and home buyers. RR has always been a major influence in high cost of housing. Most of the times when land cost increases by 15-20% the Municipal council increases the other related taxes to 15% even the Income tax is increased by 35% which ultimately affects the house buyers. If government sees this hike as a measure to bring down illegal constructions in the city it should also consider effects on other legal builders. Intervention of Public representatives in this matter is also important," said D S Kulkarni, CMD, DSK Developers.
Aniruddha Deshpande, MD, City Corp believes that the government should consider differentiating RR rates according to the apartment sizes. "For flats under luxury segment with larger floor areas can have recently announced RR rates but for small apartments these RR rates should be distinguished," said Deshpande.