The Maharashtra government has decided to give a black New Year gift to Mumbaikars. It has decided to increase stamp duty ready reckoner rates for both residential and commercial properties by 30% from January 1 onwards, according to a senior Mantralaya official.
And since property tax levied by the BMC is based on the capital value of the property, this levy too will go up. The cumulative effect of this is that prices of apartments and commercial premises will shoot up further. Already, the real market is passing through a lean period. The government’s move will further depress market sentiments. Ready reckoner rates for paying stamp duty for registration of sale deeds are linked to the market value of the property concerned and it is annually updated.
The state revenue department official said the government is expecting to raise at least Rs5,000 crore more in 2014 from the proposed hike in ready reckoner rates. (See box)
Baba Siddiqui, Congress MLA from Bandra (West), has written to chief minister Prithviraj Chavan and revenue minister Balasaheb Thorat requesting them “not to raise the ready reckoner rates”.
He told dna on Tuesday that “the property market is already down. Developers are not able to sell the apartments. Besides, it will have a huge adverse impact on Mumbaikars. The increase in the incidence of property tax will be a big blow to property buyers. It is a double whammy”.
He said when Narayan Rane was the revenue minister he had refused to hike ready reckoner rates in 2008.
Shailesh Paranjape, managing director of Paranjape Group, said the market is going through a tough time. “Buyers are paying several taxes. At least 15% of the cost of the house goes in taxes only. If the state government seriously wants to reduce property prices, then they should not increase the ready reckoner rates for at least two years,” he said.