How Does ASR Impact Property Values In Maharashtra?
Nikshep Jadhav, one of our regular readers wrote to us asking, “What is ASR and how does it impact the Maharashtra property market?”. An ASR or an Annual Statement or Schedule of Rates is what most homebuyers know by the name of Ready Reckoner rates (RR) . According to the provisions of the Maharashtra Stamp Act, the ASR is revised at the end of each year and are the market values of properties determined by the government for payment of stamp duty. This is the benchmark rate. The market value of a property may vary depending on a host of other factors, including the location, the amenities provided, the brand of the developer, the age of the building etc.
Why ASR?
To arrive at the market value of a property, knowing the ASR or ready reckoner is important. The exact district, taluka, division or village, type of property (whether residential, industrial, commercial etc) , the cadastral survey number, the chain and triangulation survey number, the final plot number, the survey number, the GAT number or area number, will together be important to tell you the value of a particular unit in that location. To know most of these, the RR rate has to be known.
Any increase in the ASR manifests itself as higher property prices. Also, the municipal corporations calculate property tax on the basis of the ASR.
In April this year, the ready reckoner rates in Maharashtra were supposed to be hiked from five per cent to seven per cent but representatives from the real estate sector asked for a reconsideration. Maharashtra Chief Minister Devendra Fadnavis decided to keep rates unchanged for the land (not for developed properties in Mumbai) . This was meant to boost affordable housing projects in Mumbai and around and help the market recover from the slump.
What happens if the ASR rates are higher or lower than market value?
When the market value of a property is lower than the ASR or the RR rates, the authorities can seek details from the buyer and the seller. For instance, if someone wants to buy a property worth Rs 4 crore, but the RR rates show the value at Rs 4.5 crore, then based on the tax records, the property would have been taken to be sold for Rs 4.5 crores. It will be later added to the new homebuyer's income and the seller's income as well. In case market rates are higher, the homebuyer ends up paying a higher stamp duty and the value of the property goes up further.
It is owing to such differences that industry analysts often complained of unregulated income or black money within the system.
Revised ASR for Maharashtra in 2017
The 36 districts of Maharashtra have been divided into eight regions - Amravati, Aurangabad, Latur, Mumbai, Nagpur, Nashik, Pune and Thane. You can click here to see the ready reckoner rates in Maharashtra.