Ready Reckoner Rate in Maharashtra: Know Its Meaning and Importance

Like all markets, real estate follows the law of supply and demand. This means when any locality or neighbourhood experiences a high demand for residential or commercial property, the prices go up. Similarly, any area that experiences high supply or inventory can find developers struggling to find buyers at a fair price.

Since the value of transactions and the asset price is considerably high, the government sets a minimum property value for every city, neighbourhood, locality, and area. This is referred to as the Ready Reckoner rate in cities like Mumbai and Circle Rate in cities like Chennai and Delhi.

Key Points to Know about Ready Reckoner Rate

• Ready Reckoner Rate or Circle Rate is the minimum amount for which a property can be registered. Even if the sale price or transaction value is lower, this is the amount on which stamp duty and registration amount is calculated. 
• If the property price or sale value is higher, the registration and stamp duty to be paid is on the actual value of the transaction and not on Ready Reckoner Rate.
• The Circle Rate or Ready reckoner rate is set for every state, city, and locality by the state government. It is also periodically revised by the government.
• Ready reckoner rate helps prevent exploitation of sellers and buyers of real estate. It helps stabilize markets and prevents free fall.

Why is the Ready Reckoner Rate important?

Ideally, the ready reckoner rate or circle rate is the minimum value that any property buyer needs to pay the seller during the real estate purchase. Now in practice, the property value may be different. This cost of the flat or any property is established as a result of negotiation between the buyer and seller, in this case, the property developer and the home buyer. In legal terms, the sale of a property is only complete when it is registered in the name of the new owner and the stamp duty is paid. The ready reckoner rate is the minimum amount that a property can be registered for, and registration charges and stamp duty must be paid on this registration amount. This makes understanding the circle rate or ready reckoner rate an important part of your home-buying decision.

Does the Ready Reckoner Rate change?

Property registration and stamp duty charges are collected by the state government. In addition, the government undertakes revision of ready reckoner rates periodically to maintain the stability of value and to prevent developers and homebuyers from falling victim to exploitative practices.
Since the real estate values over a long-term period are on an uptrend, the ready reckoner or circle rate increases over time. In some exceptional cases, the state government allows for rebates or concessions to stimulate market growth. For example, the real estate market experienced a slowdown as a result of the COVID-19 pandemic, and there was a large unsold inventory with property developers. To encourage homebuyers to invest, the Maharashtra government waived the stamp duty on the ready reckoner rate by 2% (for registrations between January and March 2021). With a pick-up in demand, however, the ready reckoner rates were hiked in most parts of the state from March 2022.

How to calculate Ready Reckoner Rate?

The state government determines the ready reckoner rate depending on the city, the locality, the street or exact location, the property type, size, and other factors. However, it is important to remember that this is the minimum value for property registration. This means that if the actual transaction value is higher, the registration and stamp duty must be paid on the higher value. The exact calculation of the minimum registration charge and stamp duty will depend on three factors – 

• The measurement of the built-up area of the unit
• The measurement of the parking slot (open or covered)
• The circle rate of the location

Ready Reckoner Help – Any change in the ready reckoner rate can impact the price of your home. This is because construction costs in any circle or even the stamp duty increases with a change in the ready reckoner rate. Your Blox relationship manager can help you understand these circle rates, guide you in picking the right locality or neighbourhood to optimise your asset value, and help identify the perfect apartment or flat in Mumbai and Thane to suit your financial and family needs. With expert guidance, homebuying can be the realisation of your aspirations without the stress or any hassles.