MCHI cries foul over RR rate hike

The Maharashtra Chamber of Housing Industry (MCHI) has cried foul over the State government’s decision to hike its Ready Reckoner rates that guide the stamp duty and other levies. The MCHI in a release said the real estate customers will be hit hard.

“This is the beginning of an unhappy New Year for the customer,” said Paras Gundecha, President of MCHI, the representative body of the real estate industry.

The industry has been demanding reduction in RR rates by 20%. MCHI had given a representation to State Revenue Minister Balasaheb Thorat explaining the hardships being faced by the customers in view of burden on account of inflation, service tax, high cost of funding, VAT and labour cess, Gundecha said.

“At one stage, the people were even given to understand that the Government planned to maintain a status quo on RR rates which we welcomed,” he said.

By government’s own admission the stamp duty collection had fallen by over 30% last year due to low sales of property, he said and pointed out that the increase in RR rates will now lead to a hike in stamp duty. “Any more financial burden on the customer is bound affect the sales further and this goes against the government’s policy of providing affordable housing to the shelterless,” he said.

He also pointed out a dichotomy in the government’s policy when it charges the stamp duty by built up area where it is asking the developers to charge by carper area. Moreover, the overall difference between carpet and built up does not work out to be more than 10%. But the government calculates the built up at 20% more than the carpet area. This way, the customer lands up paying more from his pocket, he explained.

Gundecha said out that even globally the sale of real estate property has been very low during the year 2011 due to the prevailing negative sentiment. In Maharashtra, developers across have been offering discounts to customers to help them realize their dreams of owning homes.

He appealed to the government to immediately withdraw the RR rate hike and work out a plan, in consultation with the industry, to help revive the real estate industry which supports 200 other industries.

The industry is always prepared to work with the government for any scheme that would help the buyers, he added.