All About Ready Reckoner Rates Mumbai

Before purchasing property in Mumbai, you must know the term ready reckoner rate. Let's find out about it.

Have you been planning to buy a house in Mumbai? Are you done deciding where you want to purchase a house? Numerous questions could ask if you like to purchase a house or property in Mumbai or any other state of the country, you would be required to pay the stamp duty and get the property registered before the property transfer. When you visit the sub-registrar office, you will learn about a new term, the Ready Reckoner Rate.

New Ready Reckoner Rates Mumbai has been announced by the state government, which will be applicable across the state for the financial year 2022 & 23. Ready Reckoner (RR) rates have been increased by an average of 8.80 per cent by the government of Maharashtra.

You would be surprised that you can't pay the stamp duty on your original buying cost. However, you would be required to pay according to the ready reckoner rates of the respective area.

What Are Ready Reckoner Rates?

Area-wise rates, also known as circle rates, are published annually by all state governments to ensure the accurate valuation of real estate properties. Also referred to as Ready Reckoner Rates (RRR), circle rates vary across states, cities and localities.

For a property transaction to take place in an area, circle rates act as a benchmark, and the transaction held below would not be considered valid. Usually, it is the minimum value a buyer must pay for the property and the minimum price on which the government levies stamp duty and registration fees. But, if the actual property cost surpasses the circle rate, it will charge the stamp duty and registration fee on the asset's actual price.

How Ready Reckoner Rates Rule the Real Estate Industry?

Although circle rates determine the selling price of a property, there is no capital on the maximum market rate or property price. To explain it further, a buyer agrees to pay the price for a property based on the amenities provided and previous property transactions in the location is termed market price. In India, most properties are sold at market rates, and as these rates are generally higher than RRR, buyers spend more for them.

But, it has been seen that if the circle rates are revised either quarterly or bi-yearly, it will ensure parity between market rates and the circle rates. Thus, the state governments should revise the circle rates from time to time.

The circle rate revision will benefit the state governments in collecting higher revenues through stamp duty and registration fees due to higher circle rates. It would also help reduce the black money circulation in the real estate sector.

To sum it up, the circle rate is a good indicator of the price for homebuyers to pay in an area. Also, as the market rate is usually higher than Ready Reckoner Rates Mumbai, it is recommended to invest in an area where there is a smaller gap between the two because the increase in RRR will imply an increase in market rates. It indicates that a higher market rate equals a higher property cost for a buyer.

What is the Impact of Ready Reckoner Rates Mumbai?

Registering their properties for the people in Maharashtra is compulsory regardless of the property's market value. Depending on the ready reckoner rates of the property, the stamp duty and registration charges are calculated.

The buyer will be required to pay extra stamp duty and registration charges for the transaction if the chosen property market value stands lower than its ready reckoner rate. An individual can file a complaint with RERA Maharashtra if the transactions have been done below the ready reckoner rate of any specified property.

From 31st March 2022, the rates have been hiked in Maharashtra. The rates increased by an average of 8.80% in Thane, Navi Mumbai, Pune, Panvel, and all the other places in Mumbai. But, the Ready Reckoner Rates Mumbai will remain the same.

What is the Ready Reckoner Rate Mumbai?

Here are the average rates of some major regions in Mumbai:

Factors Affecting the Ready Reckoner Rate in Maharashtra

In Maharashtra, not all towns, cities, or residential and commercial sectors have the same ready reckoner rates. Several factors affect the state's ready reckoner rates. A few factors that affect Ready Reckoner Rates Mumbai are

Market Value: In Maharashtra, the ready reckoner rate is calculated using the property's market value.

Property Use: The RRR value of the commercial property is higher than that of the residential property. The cost of the land is also more than that of a flat or an apartment.

Amenities: Local amenities are also considered when determining the ready reckoner rate. Rates will be higher in a location with good roads, train connections, hospitals, schools, parks, and shopping complexes.

Property Location: In Maharashtra, ready reckoner rates are significantly influenced by a property's location. For instance, rates are lower in rural areas than in cities.

What Happens if the Property Sells at a Lower Rate than the Ready Reckoner Rates?

Suppose the transaction being conducted took place less than RRR; in that case, both the buyer and the seller are susceptible to a penalty. The additional criteria attached is that the difference from the regional average rate must be 105 or less.

They would therefore be subject to a high tax burden. As per the Income Tax Act Section 43A, the seller and the buyer are entitled to a 35% penalty for disposing of any property at a price below the Ready Reckoner Rate (RRR).

How to Check Ready Reckoner Rates Mumbai Online?

Customers can access the Department of Registration and Stamps website to get the latest ready reckoner rates. For illustration, look at the following:

• Step 1: Go to IGR Maharashtra, the department of registration and stamps of Maharashtra's official website. Now navigate to "Online Services."
• Step 2: If you choose "e-ASR" and "Process," it will direct you to the map page. By clicking, choose the topic you want to learn more about.

How to Check Ready Reckoner Rates Mumbai Offline?

• Step 1: Visit the local registrar's sub-office and speak with one of the authorised people to receive a copy of the yearly statement of rates (ASR).
• Step 2: Provide details about your property, like its location, neighbourhood, owner's name, city, etc., to receive ready reckoner rates in Mumbai.
• Step 3: To get the exact price for your home, multiply the cost per square foot by the total area of your property.

Conclusion

Controlling property expenses is the primary objective of charging a ready reckoner rate for property registration. It is the lowest cost at which the property is recorded in the case of a transfer. Stamp duties and registration fees are the government's two primary revenue sources.

The real estate industry is expected to recover from its dangerous state with the help of a decrease in the ready reckoner rate. It is becoming increasingly important since the real estate industry supports several other sectors. Lowering the Ready Reckoner Rates Mumbai would result in more real estate, neighbourhood, or commercial property transactions between buyers and sellers.