Home buyers in Mumbai to feel the pinch as ready reckoner rates increase

Home buyers in Mumbai will have to pay more for their dream homes after a cash-strapped Maharashtra government sharply increased government rates used to calculate taxes paid by consumers when purchasing property.

Ready reckoner rates, as they are called, have been increased by 30-40% in case of some fastest-growing, popular suburbs in the city, triggering protests from builders and consumers and causing unease among members of the ruling BJP-Sena alliance, which captured power in the state after 15-years.

The hike, effective from January 1, could make property expensive and will most likely dampen hopes of home buyers waiting for a fall in property prices after years of dizzying climb. It will also make it difficult for builders to get rid off an increasingly bloated inventory.

Posh residential localities such as Worli and areas near Bandra-Kurla Complex, the city's fastest-growing commercial complex home to some big financial institutions, are among places where rates have been increased by 30-40%. Rates in popular suburbs such as Goregaon, Borivali, Malad, Chembur, Ghatkopar and Vikhroli have also been increased. These localities are home to the city's burgeoning middleand upper middle-class families, many of whom have voted in favour of BJP in the October assembly elections.

While the average hike across the city is between 15% and 20% for 2015, the highest increase is about 40%. The average hike in the past two years has been 13%.

"We will again approach the state government to stay this hike because it will hurt sales. The move will not result in higher revenue for the state as sales itself will remain subdued due to the hike," said Dharmesh Jain, MD of Nirmal Lifestyle. Jain said the developers' body MCHI-CREDAI will seek to meet the state revenue minister in the next few days.

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MCHI-THANE has always been very clear that fine housing complexes and shopping malls cannot stand in isolation. A great City is the sum total of great buildings, great infrastructure and great people. MCHI has been committed to growth of the real estate sector and is credited with the harmonious growth and rise in quality and standards of construction in Thane City in the past decade.

Its aim as an Association of Developers has been to seek rational rules and regulations which are uniformly applied across the board as this will to a great extent result in speedy construction, cost reduction, fair pricing and a push for better quality standards at par with the developed world, with a high level of transparency.