The Ghaziabad district administration has started the process for revising circle rates of properties for 2016-17. The officials are of view that there should be a minimal or no hike in rates due to the slump in the real estate market at present.
Circle rate is the minimum value at which the second sale or transfer of a property takes place. Since 2013, the rates are increased every year from August 1.
Last year, officials had increased circle rates by 4%-5% as compared to the rates in 2014-15. The rates were hiked last year only for residential plots. Rates in notified industrial areas and for commercial properties were left untouched.
“There is a slump in the real estate sector and we will keep this in mind. The objections (from the public) and the government view about the situation will play a role in deciding the circle rates. Although there is a general view that rates should not be increased, we have to meet the annual revenue targets too,” said Vimal Kumar Sharma, district magistrate, Ghaziabad.
For the past couple of years, the stamps department has failed to meet the annual target set by the state government.
During 2014-15, the department could amass only Rs 1,064 crore against a target of Rs 1,400.6 crore. During 2015-16, the department generates only Rs 970 crore as stamp duty on property registration against a target of Rs 1,540.7 crore. This year too, the stamps and registration department has a target of Rs 1,617.70 crore.
With respect to registration of sale deeds, Ghaziabad has witnessed a decline from 76,904 in 2014-15 to 63,526 in 2015-16.
Officials said suggestions from various agencies such as the Ghaziabad development authority, UP Avas Vikas, UP state industrial development corporation and the municipal corporation will be taken into account.
Last year, the officials had proposed a hike of 2%-10% in circle rates but had to bring it down to 5% after objections from real estate developers.
Even developers are of the view that the hike should be realistic.
“We will soon send a representation to the state government to look at ground realities, especially in the NCR region. An average estimate shows a decline of 10%-15% in sales at present. Homebuyers’ protests have also affected sales. We will quote the example of Haryana, which did not increase circle rates,” said Deepak Kapoor, president, Confederation of Real Estate Developers’ Association of India (Credai western UP).
Last month, the district administration of Gurgaon proposed a 15% reduction in circle rate across all segments for the 2016-17 fiscal. The decision, according to officials, was taken in view of the sluggish real estate market.