Reflecting the sombre mood in the real estate sector, the Maharashtra government, for the first time in eight years, has not changed the indicative prices of properties in the ready reckoner, which is used by the government to charge stamp duty on property transactions.
The realtors and experts are not happy over the move and expect some bold steps, like reduction in ready reckoner prices, to give a boost to the sector.
The government called the decision of not changing the ready reckoner prices as temporary and said it would review the decision at a later date. Registration and Stamp Duties Inspector General Ram Shingare said, "The decision is a temporary one and it will be reviewed at an appropriate time."
This means that irrespective of the actual value of transaction, the government will continue to levy 5 per cent stamp duty on the basis of January 2008 prices.
In the last ready reckoner, the state government had increased the prices of landed properties in the island city (from Colaba to Mahim and Sion) by an average 38.42 per cent. Sharpest rise was witnessed in the eastern suburbs between Kurla and Mulund.
But during the last four to five months of this calendar year, the real estate sector in Mumbai witnessed a major downfall with prices of residential properties dropping by 25 to 30 per cent and commercial properties from 10 to 30 per cent.
This reflects best in the state government's stamp duty collection figures in the financial year 2007-08, when the state government mopped up a whopping Rs 4,406.49 crore (Rs 44.06 billion). But in the first nine months of the current fiscal, the state government has been able to collect only Rs 3,244 crore {Rs 32.44 billion (figures as on December 29, 2008)}, which is only 73 per cent of the amount collected in the last financial year.
Speaking to Business Standard, Rajesh Mehta of the property consultancy firm Raha Relators said, "The state government's move of not changing the ready reckoner rates in accordance with the market conditions is definitely going to dampen the spirit of this sector, which is already in trouble."
