Come 2016, be prepared for a hike in RR rates
Real-Estate-Market 2016
Ready reckoner rates (RR), which apply from January 1 every year, are used to calculate the value of immovable property like commercial or residential buildings and land and accordingly levy stamp duty on them.
The state stamp duty and registration department is all set to increase these rates in the coming year to bring them in sync with market realities.
“In 2009, the stamp duty and registration department had decided to keep the ready reckoner rates unchanged, but the Comptroller and Auditor General (CAG) flagged that this had resulted in a revenue loss of Rs568 crore to the state government,” said an official from the department. “In 2016, we will increase these rates in tune with the market rate,” he added. He further stated that last year, the average rise was about 14% compared to 27% in 2013 and around 38% in 2012. This year too, the increase will not be much.
At present, the RR rates for “value zones” are compiled based on the average of market rates, local inquiries, documents registered with the department, information from media reports, real estate exhibitions and market intelligence which is a subjective system that gives inexact figures. . Therefore, the department is trying to arrive at these figures based on scientific computation. “The Income Tax department will hugely benefit from a scientific ready reckoner rate as it bases the assessment of builders and developers on it. Development charges, premiums levied by urban local bodies are also computed on the basis of this rate only. A ready reckoner which reflects market rates is the best way to curtail movement of black money,” the official said.
Scientific computation of ready reckoner rates is done using satellite imagery to identify land located close to highways and taking into account district-level details of land for which non-agricultural (NA) permissions have been given to lay down a rational price discovery mechanism. This will guarantee the commercial value and potential of these lands is reflected in the fresh ready reckoner.
