The answer is blowing in the wind
The George brothers’ Avatar small wind turbine is generating electricity for troops in Leh
In a bid to boost the real estate market in Maharashtra, the State Government had reduced stamp duty to 2 per cent (from 5 per cent) a few weeks back. However, in an unexpected turn, the Government of Maharashtra now increased the circle rate of properties by 1.74 per cent on an average across the state. This could, to an extent, offset the benefits of stamp duty reduction. At a time when the demand for house property has not picked up due to income uncertainties on account of the Covid-19-led-slowdown in the economy, hike in circle rates, especially in Mumbai, could impact sales for developers going ahead.
Circle rate is the minimum designated rate or price per square feet of land or property fixed for a locality, by the State Government, at which transactions have to be registered. This rate is also described as guideline value or ready-reckoner rate. The rate varies with state to state and is revised from time to time depending on demand, supply and development of the area.
Read also: All you wanted to know about stamp duty
The circle rates in some regions including Thane, Navi-Mumbai and Raigad, has been increased between 1.42 and 3 per cent. However, in certain regions, the State Government has reduced the circle rates by 0.6 per cent.
The recent increase in circle rates could dampen the sentiment towards purchase of house property. This is because the stamp duty is paid either on circle rate or market/agreement value, whichever is higher. Let us understand the impact of the increase in circle rates. Say, you purchase a property at the circle rate. The cost of the property is working to be ₹80 lakh, the stamp duty of 2 per cent is payable on this amount, which works out to ₹1.6 lakh. Now, in your region, the hike in circle rate is 2 per cent, which means, you will pay stamp duty of 2 per cent on ₹81.6 lakh, which works out to ₹1,63,200.
According to Samantak Das, Chief Economist and Executive Director - Research & REIS, JLL, India, “While the government had taken a welcome step by reducing the stamp duty rates last month, the hike in ready-reckoner rates acts as a sentiment dampener.” Das further adds that this increase in rates (though not significantly high) is not warranted in the current market conditions when demand is yet to rise. He says, “It could have been delayed.”
Read also: What should home buyers know about stamp duty and registration charges?
At a time when prices in most regions in Maharashtra have remained more or less stagnant, at around ₹6,800 per sq ft (average), hike in circle rates could affect sales for developers as well.
Some developers including Godrej Properties and Sunteck Realty have announced 10:90 schemes for their on-going projects — where home buyers have to pay 10 per cent as down payment and the remaining 90 per cent is payable at the time of possession of the property. Samantak Das says, “At a time when the market is conducive for demand to pick-up — in terms of low interest rates, reduction in stamp duty, and offers by developers — hike in circle rates is not a pragmatic approach for both developers and home buyers.”
The George brothers’ Avatar small wind turbine is generating electricity for troops in Leh
The Spanish flu (1918) devastated a port city like Mumbai. Could the lessons help as we brace for a second ...
Though the number is still woefully small, the good news is that more Indian companies are auditing their ...
Post-pandemic, airlines may have to combine punctuality with heightened passenger services, including safety, ...
Three-in-one: Passive debt funds come at a low cost and have high-quality portfolios. Some offer return ...
Trend in the rupee movement and Q4 earnings can give direction to the market
There is room for improvement in fund transfer options
Silver looks positive but lacks the higher volumes required to substantiate bullishness
Murder is a theme that is unlikely to darken and yellow with time, the writer Truman Capote had once said.
The iconic punk rock band took a whole generation along as they toured the globe for 22 years
On April 10, 1970, Paul McCartney announced that he was leaving The Beatles for ‘personal and professional ...
A model rehabilitation project for 100 families of rescued bonded labourers kicks off in Tiruvannamalai, ...
Marketers are padded up, sponsorship deals have been struck, and campaigns are rolling out. Now let the games ...
And what marketers can possibly do to bring it back in our lives
The agency has changed form over the years but its lustre has not dimmed
Media Factory has purchased the majority stake held by Sam and Lara Balsara of Madison World in Madison Media ...
Three years after its inception, compliance with GST procedures remains a headache for exporters, job workers ...
Corporate social responsibility (CSR) initiatives of companies are altering the prospects for wooden toys of ...
Aequs Aerospace to create space for large-scale manufacture of toys at Koppal
And it has every reason to smile. Covid-19 has triggered a consumer shift towards branded products as ...
Please Email the Editor