Taking into account the prolonged slump in the real estate market, the Gurgaon administration has reduced the circle or collector rates by 15% across all segments, effective from Monday midnight.
This is for the first time in a decade that circle rate has been reduced in Gurgaon, which has been one of the hottest real estate markets in the country for the last one and half decades.
A district level committee headed by deputy commissioner TL Satyaprakash had recommended the reduction in circle rates in April this year. “We had sent the proposal to reduce circle rates by 15% in the month of April taking into account the slowdown. The proposal has been approved by the government and new rates will be effective from midnight today,” Satyaprakash told HT.
Registration fees of property, a substantial source of government revenue has witnessed decline in the past two years, forcing the government to take this decision.
After the reduction in the circle rate in DLF Phase 1, which was `77,000 per square feet, the rate has come down to `65,450. Circle rate in DLF phase II,III, IV, Nirvana and South City 1 has come down to `61,200, the rate in DLF phase III would see a reduction of almost `10,000 at current rate of `56,100.
Rates in Huda sectors 14, 15, 17, 27, 28, 30, 31, 42, 43 have been brought down from `50,000 to `42,500 per square yard. The cut has been substantial in different sectors of Old Gurgaon with a reduction of almost `5,000 to 8,000.
Circle rate is the minimum value of property at which the sale of a plot, apartment, house or land takes place. It is directly related to the applicable stamp duty on the property, which has an impact on property prices. The registration of property also takes place on the basis of circle rates.
Reduction in circle rates has come as a major relief to a large number of property owners in Gurgaon, who had delayed the registration of property.
Not only buyers but developers in Gurgaon had also asked the state government to rationalise the circle rates for both commercial and residential properties as this could send a positive message to the buyers.
Usually, circle rates are revised every financial year by an average of 10-15%. But the rates for financial year 2015-16 were levied at the rates prevalent during 2014-15.