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Realty sector and property buyers have received a major respite as the Maharashtra government has put on hold the ready recknor (RR) guidelines of 2014.
These guidelines were issued under the Maharashtra Stamps (Determination of True Market Value of Property) Rule, 1995. Based on the market value determined under these guidelines, the revised stamp duty and registration fee is imposed on property buyers. The group housing and redevelopment projects and also luxury housing flats with swimming pool and other amenities would have cost more if the 2014 guidelines were implemented.
However, due to the government’s stay, property buyers will have substantial savings in the payment of value added tax, service tax, local body tax and income tax payable by the property buyers in addition to revised RR rates.
The government has clarified that the 2013 guidelines will continue till further orders. However, the government has not stayed the average 13 per cent hike in RR rates made effective from January 1 in Mumbai and its suburbs and about 15 per cent in the rest of Maharashtra.
Maharashtra revenue minister Balasaheb Thorat issued the necessary orders on Friday night following a slew of representations made by realty players including CREDAI and representatives of political parties. He told Business Standard: “The Inspector General of Registration (IGR) never consults the government while finalising the guidelines and RR rates. However, the government has received a couple of representations against the new guidelines and, therefore, I have stayed them. Till further orders, the 2013 guidelines will be in operation.” Thorat said the IGR has been asked to take into account objections raised by various bodies against the guidelines.
According to the now-stayed guidelines of 2014, if a housing society was situated in Borivli in north Mumbai with each unit of more than 100 sq mt, then the rates would be 25 per cent more than the residential rates in RR. If the rate was Rs 10,000 per sq ft, it would be valued at Rs 12,500 per sq ft.
If the plot area was more than 4,000 sq mt, having a club house, gymanasium and swimming pool, these facilities would be valued at 15 per cent more than the RR rates.
In up-market Worli in north central Mumbai, the property buyer had to pay a total of Rs 6.8 crore for a flat with the market value of Rs 5 crore. However, with the government’s stay on the new guidelines, the property buyer will be able to save Rs 86 lakh.
In Bandra, a super luxury flat having an exclusive attached swimming pool would have cost the buyer Rs 50 crore due to the 2014 guidelines. However, there will be a saving of Rs 50 lakh in stamp duty after the government’s stay.
Sunil Mantri, president, National Real Estate Development Council said the government’s move would help buyers to pay lesser stamp duty for luxury flat projects since swimming pools, gymnasia and club houses are the standard amenities in almost every project. This will also rationalise amenties versus non-amenities projects. The stamp duty will be collected based on the city survey numbers as referred in the RR instead of charging buyers based on the building specifications or amenities.
Rajesh Mehta of Raha Realtors, a property consultant said the government’s decision would help mobilise more revenue.
