MIDC property depreciation rate

MIDC property depreciation rate

The depreciation calculation for MIDC (Maharashtra Industrial Development Corporation) properties, used during property registration, typically determines the stamp duty payable based on the age and condition of the building, rather than the land.

🧮 Depreciation Calculation Basics – Key Points

1. Land does not depreciate —only the built-up structure (factory, office, warehouse) does.
2. Depreciation is applied to the Ready Reckoner Rate of the built-up area.
3. The older the building, the higher the depreciation allowed.
4. MIDC leasehold land premiums are not depreciated.

📉 Typical Depreciation Rates (Indicative)

Age of Building             Permissible Depreciation (%)
Up to 2 years                               0%
2 to 5 years                                  5%
5 to 10 years                                10%
10 to 20 years                              20%
20 to 30 years                              30%
30 to 40 years                              40%
40 to 50 years                              50%
50 to 60 years                              60%
Above 60 years                            70%

These rates vary based on location, construction type (RCC vs. shed), and local registrar guidelines.

📝 Calculation Example
Property Details
Plot Area: 1,000 sq. meters (land is not depreciated)
Year of Construction: 25 years ago
Land Rate: ₹40,000 per meter

Calculation Example
1. Land Value
Land value remains ₹4,00,00,000 (1,000 sq. m × ₹40,000), as land is not depreciated.

2. Building Depreciation
Assume construction cost = ₹ X (let’s say ₹10,000 per sq. meter for estimate).
Construction Area = 1,000 sq. meters × ₹10,000 = ₹1,00,00,000
Standard depreciation rate for factory buildings: 10% per annum (Written Down Value method).
To estimate the depreciated value after 25 years under the straight line:

Depreciation % = 30%
Depreciated value = ₹1,00,00,000 × (1 – 0.30) = ₹70,00,000

3. Total Asset Value
Land Value: ₹4,00,00,000 (not depreciated)
Building Value (after depreciation): ₹16,70,000
Estimated Current Property Value:
₹4,00,00,000 + ₹70,00,000= ₹4,70,00,000


🏢 MIDC-Specific Notes

• MIDC plots are typically leasehold; registration involves transfer of lease rights.
• Depreciation is applied only on the structure, not on land premium.
• You may need a valuation certificate from a registered valuer or architect.

Regards
9819997500 – Atul
9819992310 – Sushant
www.midcwala.com