Maharashtra: Unchanged Circle Rates A Relief For Real Estate
On 26th May 2020, in a circular, the Maharashtra government said that it will keep the Circle Rate unchanged for the current financial year 2020-21 as it could not access new rates due to the Covid-19 outbreak.
Circle rate, also known as Ready Reckoner Rate and Guidance Value, is the minimum rate at which a property can be registered in the state. Circle rate, also known as ready reckoner rate, is the minimum rate at which a property can be registered in the state. These rates vary from state to state and are subject to periodical change. Buyers have to pay the stamp duty, registration charges, and other taxes on their property purchases based on the circle rates. Simply, a hike in circle rates amounts to properties becoming more expensive.
Normally, the state government’s revenue department determines the circle rate or ready reckoner rate each year for the state according to market movements, which are revised on 1st April of that year.
The registration department generates maximum revenue for the state.
The circular comes at a time when the country’s economy is fighting with the novel coronavirus outbreak caused lockdown in the entire nation which has brought the construction activities to a pause. In fact, the real estate developers’ associations have been eyeing stimulus packages and cut in ready reckoner rates to support the sector which generated the 2nd largest employment in the country.
Lately, Devendra Fadnavis, former chief minister of Maharashtra had also suggested a 40% cut in the ready reckoner rates. However, due to the limited manpower capacity and after that the extended lockdown in the state, the revenue department could not assess the value of the property.
Real estate in Maharashtra which has been worst hit by the coronavirus outbreak in the country. Even as the government has allowed relaxation in certain areas to start construction activities but the migration of workers in huge numbers from the state has been a cause of concern for the developers.
