Registering properties in city’s posh colonies will soon become costlier as the Delhi government has raised circle rates in the areas by 50%-200%.
The circle rates are charged on the basis of the categories prescribed by the municipal corporations for calculation of property tax under unit area method, wherein the city has been divided into eight categories (from A to H, where A stands for posh colonies).
Circle rates are the minimum valuation of land and immovable properties in the city. They were first introduced in Delhi on July 18, 2007. They were further rationalised in February 2011 and November 2011.
There has been a 200% increase for Category A, a 50% hike for Category B and a 22% rise for Categories C to H.
Residents of neighbourhoods populated by middle-class residents have been spared from any steep hike. These rates will come into effect after a notification has been issued.
The circle rate in Category A areas will jump from R2.15 lakh per sq m to R6.45 lakh per sq m. This means that in Category A areas such as Golf Links, Aurangzeb Road, Amrita Shergill Marg, Vasant Vihar, Gulmohar Park and Panchsheel Enclave, no one can buy land and immovable properties for less than R6.45 lakh per sq m.
Similarly, for Category B areas such as Greater Kailash I and RK Puram, the circle rate has been increased from R1,36,400 per sq m to R2,04,600 per sq m.
Chief Minister Sheila Dikshit’s move comes before the window of opportunity to raise the circle rates before next year’s Assembly elections narrows further.
“Despite the hikes, the circle rates still continue to be lower than the prevailing market rates at which transactions take place. It has been noticed that the actual transactions take place at rates much lower than the prevalent market rates,” Dikshit said. “To curb the flow of black money, it has become important to rationalise the minimum circle rates,” she added. Dikshit said the present circle rates in Delhi are low when compared to areas such as Noida, Gurgaon and Faridabad.
However, property owners are also going to benefit from the move as banks generally give loan according to the prevalent circle rates in the area. While registering a property, one has to pay stamp duty according to the prevalent circle rate.
Revenue secretary Dharam-pal said: “We expect to generate additional revenue of R200 crore from the hike in circle rates.” In 2011-12, the Delhi government had collected Rs. 2,000 crore in revenues from registration of properties and R1,300 crore has been collected so far in current financial year.