Maharashtra Government Likely to Raise Ready Reckoner Rates by 10%
The Maharashtra government is contemplating a significant 10% increase in the Ready Reckoner (RR) rate, the state’s benchmark for property valuation, set to take effect from April 1, 2025. This revision, aimed at bolstering the state’s revenue through enhanced stamp duty collections, has raised concerns within the real estate sector, particularly regarding its potential impact on affordability and market stability. As discussions between the finance and revenue departments gain momentum, the real estate industry is calling for a more balanced approach to ensure the sector’s long-term growth and sustainability.
The primary concern among industry stakeholders is the persistent gap between RR rates and actual market prices, which often fail to reflect the real-time dynamics of the property market. Dr. Niranjan Hiranandani, Chairman of the National Real Estate Development Council (NAREDCO), expressed his reservations, pointing out that while RR rates are intended to standardise property valuations, they lag behind market trends. He explained, “Market rates fluctuate due to various factors like demand, location, and economic conditions, whereas RR rates remain static and may not capture these changes adequately. A 10% hike in RR rates will increase costs for developers and homebuyers, which could further dampen the already strained affordable housing sector.” Hiranandani’s statement underscores the delicate balance needed to align government fiscal objectives with the realities of the real estate market.
NAREDCO Maharashtra President, Prashant Sharma, echoed these concerns, advocating for a more gradual revision to mitigate adverse effects. He highlighted the challenges posed by rising transaction costs, which include not just stamp duty but also registration charges. These costs, when increased, could discourage property purchases, ultimately affecting housing affordability in a state that already struggles to meet growing demand. “The real estate sector is a key driver of Maharashtra’s economy, and an abrupt increase in RR rates could have far-reaching consequences, particularly for the middle-income homebuyer,” Sharma added. He also recommended that the government collaborate with industry stakeholders to ensure the revision takes into account regional variations in pricing and ongoing infrastructure development, as well as market conditions.
From a fiscal perspective, the proposed RR rate hike is expected to increase Maharashtra’s stamp duty revenues significantly, with some estimates suggesting a rise to ₹75,000 crores by March 2026. However, as Amit Jain, CMD of Arkade Developers, noted, the higher RR rates will also result in higher transaction costs, which could make real estate less accessible. “While the hike may align the RR rates more closely with market trends, it is essential to remember that market prices are more fluid and reflect daily supply and demand,” Jain said. The disparity between the static RR rates and the dynamic nature of the property market has been a long-standing issue, and experts argue that simply increasing the RR rates may not be the solution.
The real estate sector’s growing concerns are not solely about the immediate financial impact. Rising RR rates could also affect the sector’s long-term sustainability, especially with increasing pressure on developers to offer affordable housing. To address this, experts are advocating for a more balanced approach that includes incentives for affordable housing, reductions in stamp duty, or alternative measures to ease the financial burden on buyers and developers. In the context of sustainability, it is crucial that any policy changes support the development of eco-friendly, energy-efficient buildings while ensuring accessibility for all socio-economic groups. A shift towards sustainable urban development that incorporates affordable housing solutions will help Maharashtra create a more inclusive and resilient real estate market.
In conclusion, while the proposed 10% increase in Ready Reckoner rates is expected to generate significant revenue for the state, it is essential for the government to take a measured approach that balances fiscal needs with the broader goals of market affordability and sustainability. The real estate sector, an important pillar of Maharashtra’s economy, requires policies that are both forward-thinking and aligned with the realities of a rapidly evolving property market.
