Mumbai Circle Rate reviewed; Einnerpel prices rose by 3% CAGR in ten years

Copyright © HT Digital Streams Limit all rights reserved. Money Shipra Singh 4 min Read 02 Apr 2025, 12:35 PM IST The Ready Reconer rates are used as a measure to charge stamp duty and other taxes associated with real estate transactions. (Pixabay) Summary The Maharashtra government increased ready stretcher tariffs for FY26 after two years, with an average increase of 4.39% outside Mumbai and 3.39% in Mumbai. These rates determine minimum property prices and affect the calculation of stamp duty, reflecting the market trends of the property market. After a two -year gap, the Maharashtra government raised the rates for Ready Reconer (RR). RR rates, also known as circular rates, are estimating the state government of the minimum property prices in an area. The state for the state, excluding Mumbai, rose by an average of 4.39%, while the RR of the financial capital rose by 3.39%. These rates are used as a measure to charge stamp duty and other taxes associated with real estate transactions. It is usually revised each year based on real estate transactions, development projects and market trends in the previous year. Read also | Lodha, Godrej Properties can benefit from the traction in the Mumbai metropolitan region, as rates are determined on the basis of property transaction values ​​of the previous year, among other things, the change of the year-to-year reflects the actual appreciation or depreciation in the property market. According to Bhoumick Vaidya, share partner at Shardul Amarchand Mangaldas & Co, the rise in RR rates this year has won the growth in fixed property prices this year. “In Mumbai, prices have risen in reality, but the RR rate has not been increased for the past two years,” Vaidya said. Mumbai real estate trends at 3.39%are the increase in the RR rate of Mumbai the third lowest among the 28 municipalities listed in the government’s circular on revised rates. The state government has revised RR tariffs separately for municipal, rural and Nagar Panchayat areas. Mumbai is not included in any of these zones and is treated as an individual area (Brihanmumbai Municipal Corporation of BMC). Municipal corporation areas outside Mumbai recorded an average increase of 5.95%. Some of the municipalities with the highest increases include Thane, Nashik and Navi Mumbai, which rose 7.72%, 7.31%and 6.75%respectively. Mumbai recorded a phenomenal 15% increase in the RR rate in 2015, according to data over the past ten years. Since then, rates have either grown slightly or stagnated. In 2017, the rate was increased by 3.95%, and it remained unchanged in 2018 and 2019. The inspector general of registration and controller of stamps said in his circular that the rate was left unchanged as a result of the recession in the fixed income sector for two consecutive years (FY19 and FY20). Read also | Etonhurst Capital To raise £ 500 Crore Real Estate Fund for Mumbai in 2020 Revolation Projects, Mumbai’s RR rate fell 0.6% in the pandemic’s aftermath, which continued by FY22. According to the state government data, Mumbai was the only city where the RR rate dropped during this period. In the other key markets of Pune and Nashik, they rose 2.79% and 2.08% respectively. Since then, Mumbai’s RR rate has risen gradually, but it remains pale compared to other major cities in Maharashtra. Mint’s calculations show that Mumbai’s 10-year property price CAGR works out at only 3% based on the RR rates (see GRFX). The trend in Maharashtra’s RR tariffs is confirmed by the Reserve Bank of India’s Housing Price Index (HPI), which rose 2.8%, 3.8% and 3.1% in the third quarter of FY23, FY24 and FY25. RBI’s HPI follows changes in home prices based on data level data level received from the registration authorities in ten major cities is-ahmedabad, Bengaluru, Chennai, New Delhi, Jaipur, Kanpur, Kochi, Kolkata, Lucknow and Mumbai. Property sold under the RR rate In the case of emergency sales or in areas without a significant rise in prices, property can eventually be sold at a rate lower than the RR rate. Since the RR rate is the minimum market value to which stamp rights apply, the property owner must prove to the Registrar that the fair market value of his property (FMV) is lower than the RR rate. This is important because stamp duty and other taxes must be paid for the circular rate. “The owner can apply for assessment under the Stomp Act with the Registrar before he sells the property. They will have to justify why the property is sold at a lower value than the circular rate. The registrar will evaluate the case and decide whether the actual selling price as FMV may be allowed or not for the calculation of stamp duty and income tax,” Vaidya said. If a property is sold without applying for assessment, stamp duty will be applied to the RR tariff. That’s not all, there are also challenges on the income tax front. According to the Income Tax Act, when the difference between the sales rate and the RR rate is more than 10%, the buyer and the seller must pay extra taxes. Read also | Pan-India developers chase the redevelopment of Mumbai, SRA opportunities The buyer must pay taxes on the difference between the actual sales value and circle rate below income from other sources, as the tax department is considered to be considered, which means the balance amount is paid in another form and is therefore tax on tax. The seller may have to pay capital gains tax according to the RR rate. According to the IT Act, this additional tax does not apply if the difference between the FMV and RR rate is less than 10%. However, there were cases that sellers get inquiries from the IT division, even if the difference was less than 10%, Vaidya said. Therefore, it is better for sellers to apply for assessment to avoid it. In addition, seal rights must be paid on the circular rate, regardless of the 10%limit unless the owner receives a favorable order from the registrar and his selling price is accepted as the FMV. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Money #property #maharashtra Mint Special