While numerous factors contribute to the hike in real estate prices, there is one significant factor, known as “ready reckoner rate” that has a bigger part in deciding the movement of real estate prices. Before explaining more about what are these rates, it is important to understand that ready reckoner rates differ from one area to another and is set by the state government of the respective state.
What are Ready Reckoner rates?
These rates are the prices of the residential property, land or commercial property for a given area and is published and regulated by the respective state government. These rates are regularly revised on a yearly basis depending on the perception about the government for such price revisions. Therefore, a homeowner or buyer would be required to pay the stamp duty or registration amount, not below such stated ready reckoner rates or the actual price of the property, whichever is higher.
Example – A house property in a certain area has a ready reckoner rate of Rs. 50 lakhs, while the builder has demanded the price of Rs. 60 lakhs. In this case, a homebuyer would have to pay stamp duty on Rs. 60 lakhs only, as it being a higher price.
How Ready Reckoner rates are important for home buyers?
In short, the ready reckoner rates are nothing but fair value price for a property set by the state government, where the builders have the freedom to charge premium over and above such rates. Clearly, it shows that a person will have to pay a value much higher to own a house over and above the reckoner rates. Therefore, if a state government revises such rates then it means that a home buyer would have to pay more than before. The ready reckoner rates serve as the biggest revenue source to the state governments. For instance, the Maharashtra State government has recently declared to hike ready reckoner rates, which will make properties altogether very expensive for buyers.