If you are planning to invest in property in Delhi, seal the deal soon. Registering property might get costlier with the state government planning to increase circle rates by 20%.
The revenue department has already submitted the proposal, and the Delhi cabinet is expected to take a final decision soon.
Circle rate is the minimum rate defined by the state government at which a property can be bought or sold. Every locality has its own circle rate depending on its category as prescribed by the civic agency depending on infrastructure and other parameters.
Delhi is divided into eight categories - A to H, wherein A stands for posh colonies such as Defence Colony, Gulmohar Park, Panchsheel Enclave and Hauz Khas.
Currently, category A property owners pay 6% (4% for women) of Rs. 2.15 lakh per square metre (sq m) as stamp duty. If rates are hiked, they will have to pay 6% of Rs. 2.57 lakh per sq m.
Simply put, a 100 sq m property in category A colony, which will cost a minimum of Rs. 2.57 crore, will now attract stamp duty of Rs. 15.4 lakh instead of the existing Rs. 12.9 lakh.
Officials said circle rate for category B areas may go up from Rs. 1.36 lakh to Rs. 1.63 lakh, and for category C areas from Rs. 1.08 lakh to Rs. 1.3 lakh.
"Revision of circle rate is necessary to make the property rates more realistic and bring them closer to market rates. This will also eliminate the role of black-money in property transactions," said a senior Delhi government official.
Last year circle rates were revised twice.
Delhi government officials claim that the impending hike notwithstanding, circle rates in Delhi will continue to be less than the prevailing market rates in Delhi as well as existing circle rates in Gurgaon and Noida.
The revenue department expects to earn an additional Rs. 600 crore in 2012-2013 if the proposed circle rates are approved.