If you were unable to buy a property in Delhi due to the prevalent custom of paying a part of the amount in black, there’s some good news for you.
With the Delhi cabinet deciding on Tuesday to enhance circle rates in the capital, property transactions will get costlier. The new rates, however, are also expected to curb rampant undervaluation of properties and payment of black money.
“Most buyers in Delhi pay the price of property in white and black money,” said a senior Delhi government official. “The amount calculated according to the circle rate is paid in white, the rest in black,” he said.
While the minimum price of a 200 sq metre plot in Lajpat Nagar, which falls under category C, as per the existing circle rate is R54,60,000, the actual selling price could easily be two to three times this amount. This means, the buyer would have paid a stamp duty of R3,27,600 by undervaluation of the property but actually paid a lot more.
As per the new circle rates, the minimum price of the same property will be R1,09,20,000 now, apart from the stamp duty of R6,55,200.
With most transactions in black, the government loses revenue and buyers, unable to cough up the black amount, can’t buy real estate in Delhi.
If the new circle rates can bring down the black component of the transactions, many buyers will also be able to pay the property price by taking a home loan.
The new circle rates will come into effect after they are notified, CM Sheila Dikshit said.
This is for the first time that circle rates have been increased after they were first introduced in the capital in July 2007.