Published on: Dec 23, 2018 @ 17:38
If you are planning to buy a property in Gurugram, you may first need to check the recently revised circle rates of the area. Recently, circle rates of Gurugram have been revised by the District Administration for the third time this year according to a report published by The Times Of India. The hike in the rates in the Millennium City has come into effect from December 20.
In some areas, circle rates have been hiked significantly and buyers of these areas will have to pay more than the existing circle rates after the hike. According to a TOI report, Dron Vihar and Feroz Gandhi Colony witnessed an increase of 110 per cent of rates from Rs 10,000 per square yard (psy) to Rs 21,000 psy. In Chandan Nagar, rates have been hiked from Rs 18,000 psy to Rs 36,000 psy, almost by 100 percent psy. However, rates have been left unchanged in those areas where the property is already quite expensive. These areas include most Haryana Urban Development Authority (HUDA) sectors, privately built colonies developed by DLF, areas around the shopping malls and the Golf Course Road. Rates will also increase for commercial property in the city while rates of agriculture land in some areas will decrease 10 per cent according to the TOI report. The district administration spokesperson said that this was the first time when the rates were fixed on master plan categories.
The rates were previously revised in the months of February and April this year. First, the district administration of Gurgaon had revised its circle rates in February this year by 10-15 % and it came into effect from February 12 and lasted till the end of the March. Again after two months, circle rates in Gurgaon were increased by up to 20% from 9th April 2018.
The Circle Rates
Circle rates are the government-specified minimum rates below which a property cannot be registered at the time of transfer of ownership. It is this rate on the basis of which buyers have to pay stamp duty on their real estate transactions. Stamp duty for a transaction is calculated on the basis of the circle rates of a specific area. These rates, also known as government rates and collector rates, vary from state to state and area to area.
Basically, circle rates are revised to reduce the gap between the existing market rate at which transactions are happening and the government-specified minimum price for registration of properties. Generally, revision in circle rates is a regular periodic exercise of the local administration and it is not done more than two times in a fiscal but this year this is the third revision.
Stamp duty fees for registering property at the time of transfer of ownership is a major source of revenue for the government. Therefore, the hike will eventually increase the stamp duty paid to the state government.
Impact On The Gurugram Property Market
Typically, when circle rates are hiked, the market rates in the area also rise proportionately. The move to hike circle rates would mean properties becoming costlier as the property registration may get costlier after the new circle rates come into effect. Therefore, buying a dream house or an office in the city is likely to cost you more after the revision.
However, it is not likely to see any major impact on transaction volumes after the increase in circle rates as currently the market is end-user driven. Moreover, the price rise is unlikely to happen in the near future unless developers get rid of their inventory. But, this also gives an indication that the Gurgaon property market is reviving post the RERA, GST, and demonetization.