Gurugram proposes hike in circle rates, buying house to become more expensive
The circle rates are hiked twice in a year and the administration has sought objections for the revised rates till January 10. Move to hike circle rates is likely to depress the market further.Updated: Jan 03, 2020 09:55 IST
Homebuyers will have to shell more money to buy independent floors in plotted residential colonies, and apartments in group housing societies mostly in private developer colonies along the Golf Course Road, Sohna Road, the Delhi-Gurgaon Expressway and MG Road. This is because the Gurugram administration has proposed to increase the circle rate in these areas. With the increase in the circle rates, the buyers will have to shell out more money in the form of stamp duty to be paid to the government, said experts.
The administration, however, has not proposed large-scale changes in circle rates in colonies on the western side of the highway; areas in the old city, along the Old Delhi-Gurgaon Road, and those towards the Dwarka Expressway.
Circle rates hiked
The circle rates are hiked twice in a year and the administration has sought objections for the revised rates till January 10. Experts opined that move to hike circle rates is likely to depress the market further as the number of sellers is more than the number of buyers. “This move is not going to generate revenue and it will further reduce the transactions happening in the market,” said Sanjay Sharma, a city-based broker.
The circle rate is the minimum value at which sale or transfer of a plot, built-up houses, apartment, commercial property or land takes place. It the price at which registry of properties is done and the buyer pays stamp duty as per the circle rate.
As per the new directions, the maximum increase in circle rates has been proposed for registry of floors built on residential plots, which has been almost doubled from ₹5,500 per square foot(psf) to ₹10,000 psf. Although the district administration has sought objections from the citizens and stakeholders for the revised circle rates, many developers said that this kind of increase would badly hit the real estate market.
The circle rates for group housing projects in sectors 15,27, 28, 30, 31-32A, 39, 40, 41, 42, 43, 45, 46, 50, 51, 52, 53, 54, 55, 56, 57 has been increased from ₹5,000 psf to ₹12,000 psf. As far as flats in group housing societies and plots of licenced colonies in sectors 58, 59, 60, 61, 62, 63, 63A are concerned, the rate has been increased from ₹3,500 psf to ₹5,600 psf.
On Golf Course Road, in upscale colonies of Aralias, Magnolia and Camelia-developed by DLF, the rates have been increased from ₹20,000 psf to ₹22,000 psf. Ambience island on the Delhi-Gurgaon Expressway will also see an increase from ₹10,000 to ₹13,000 psf. In privately developed group housing colonies, which include Laburnum, Unitech World Spa, Parsvnath Exotica, The Verandas, Palm Springs, Exotica, Park Place, Belaire, Comela, Vipul Belmonte, Central Park, Princeton, Carlton, the rate has been increased from ₹8,000 psf to ₹17,000 psf.
In case of floors in licenced colonies and HSVP sectors, the rate has been increased from ₹5,500 psf to ₹10,000 psf. In group housing societies in Gwal Pahari, the rate has been increased from ₹3,000 psf to ₹7,000 psf.
For the plots in licenced colonies like Sushant Lok and DLF Phase-1, the rates for residential plots have been increased from ₹77,000 to ₹85,000 psf. The increase has been substantial in DLF Phase 2 and South City-1, where the rates have been increased ₹72,000 psf to ₹1,20,000 psf. In DLF Phase-3 and the National Media Centre area, the rate has been hiked from ₹66,000 psf to ₹80,000 psf.
Impact on real estate
While the rates have not been changed much across the city but properties in licenced plotted colonies, group housing societies, builder floors, which are mostly concentrated along Golf Course Road, MG Road, Delhi-Gurgaon Expressway and Sohna Road are going to be the worst affected, say city-based realtors. “For a floor built on a 300 sq yard plot, the stamp duty fees payable to the government earlier was ₹6 lakh. But if the new rates are brought into force, the fees would double to ₹12 lakhs. It will make housing more expensive and will again hit the realty business, which is already facing trouble,” said Ramesh Singla, a city-based developer.
A number of city-based brokers and developers said that they are planning to lodge objections with district administration against the proposed hike.
Amit Khatri, deputy commissioner, Gurugram, who is also the revenue collector, said that the revised rates have been uploaded on the district administration website. “If there are any objections, then the citizens can submit their written suggestions with revenue department at the Mini Secretariat or send it via email till January 10,” he said in a statement.