The Times of India 16.01.2010
Revised ready reckoner adds to BMC coffers
MUMBAI: For the cash-strapped BMC, the latest revision to the ready reckoner (RR) rates has come as a welcome respite.
The new rates, which have been hiked by at least 18% compared to that last year, are likely to increase civic revenue from various fees on constructions as well as premium charged from developers. The BMC's revenue receipts might rise by at least a corresponding 20%, said officials.
Recent times have been tough for the civic body, which faced a cash crunch as income from development department and property tax dropped owing to the poor economic situation. The civic body has since been trying to up the collection; among many measures taken were hike in development charges and scrutiny fee and change in the rates in various categories by two to three times in the past few months. But while all of these proposals are pending with the state government, civic officials hope that the RR revision will tide over the crisis, even if in a small way.
"The premium collected on various developments and schemes is based on land rates. Therefore, the new revised rates are bound to increase our collection proportionately to the land rates both in the form of development charges and premiums,'' said V L Joshi, chief engineer, development plan (DP) department.
The state government, earlier this year, increased the market value of real estate by 10-20% in its ready reckoner 2010. The ready reckoner is a guide for the market price of residential and commercial properties, based on which stamp duty and registration fee for their sale and purchase are calculated.
Under the revised rates, a land owner would have to pay more stamp duty because his land got more expensive; the developer would raise the sale price of his finished property as his land acquisition cost got higher; and a retail buyer would have to cough up more for property, stamp duty and registration fee.
Last year, the slump in the property market saw collection of the development charges fall over the last few months of year. The BMC had proposed to the state government to increase the DP charges. The existing charges, which account for 25% of the total project cost or 2.5% of cost of construction, is being charged currently at Rs 250 per sqmt (as commercial component) and Rs 100 per sqmt (as land component). The commercial component is charged on the permissible area, while the land component is charged on area of the plot. The heavy revision being sought is Rs 800 per sqmt for commercial and Rs 320 per sqmt for the land component. BMC's target for revenue through development charges this year is about Rs 925 crore.
Recent times have been tough for the civic body, which faced a cash crunch as income from development department and property tax dropped owing to the poor economic situation. The civic body has since been trying to up the collection; among many measures taken were hike in development charges and scrutiny fee and change in the rates in various categories by two to three times in the past few months. But while all of these proposals are pending with the state government, civic officials hope that the RR revision will tide over the crisis, even if in a small way.
"The premium collected on various developments and schemes is based on land rates. Therefore, the new revised rates are bound to increase our collection proportionately to the land rates both in the form of development charges and premiums,'' said V L Joshi, chief engineer, development plan (DP) department.
The state government, earlier this year, increased the market value of real estate by 10-20% in its ready reckoner 2010. The ready reckoner is a guide for the market price of residential and commercial properties, based on which stamp duty and registration fee for their sale and purchase are calculated.
Under the revised rates, a land owner would have to pay more stamp duty because his land got more expensive; the developer would raise the sale price of his finished property as his land acquisition cost got higher; and a retail buyer would have to cough up more for property, stamp duty and registration fee.
Last year, the slump in the property market saw collection of the development charges fall over the last few months of year. The BMC had proposed to the state government to increase the DP charges. The existing charges, which account for 25% of the total project cost or 2.5% of cost of construction, is being charged currently at Rs 250 per sqmt (as commercial component) and Rs 100 per sqmt (as land component). The commercial component is charged on the permissible area, while the land component is charged on area of the plot. The heavy revision being sought is Rs 800 per sqmt for commercial and Rs 320 per sqmt for the land component. BMC's target for revenue through development charges this year is about Rs 925 crore.
