Surcharges on additional facilities waived in group housing projects
In a move aimed at increasing stamp revenue, the district administration, on Wednesday, proposed waiving off the 6% surcharge levied on additional facilities such as swimming pool, community centre/club and gym in group housing projects in the district. The administration also proposed 21.5% decrease in circle rates of Noida’s commercial properties, which have found few takers in the last few years. Besides this, a 25% reduction in surcharge on malls and shops with centralised AC was also proposed.
Circle rates are the minimum rates which form the basis for calculating the stamp duty and registration charges. A property cannot be registered below this rate. The stamp duty is 5% on the combined valuation of project cost and surcharges.
The circle rates for Dadri, Jewar and Greater Noida, however, have been kept unchanged as the Noida administration feels the development of Jewar Airport, Metro’s Aqua Line, Dedicated Freight Corridor and the Eastern Peripheral Expressway will draw investment in the region, district magistrate BN Singh said.
The move is significant as the administration had not increased its circle rate since 2015, and this is the first time the circle rate in commercial area has been reduced.
Owing to a slump in the realty market, the stamp and registration department has not achieved its revenue targets for the last three consecutive years. The administration hopes reduction in circle rate and waiving off surcharge would help push investment in the sector.
This financial year (2019-20), the department has collected ₹641 crore till June 30, against a target of ₹2,597 crore.
The district magistrate said the administration will seek public feedback in a week’s time and then implement the revised circle rate from the first week of August.
Prior to the revision of circle rates in 2018, each facility in group housing projects was charged at the rate of 3% of the actual investment. However, last year, surcharge on two facilities—lift and power backup—was waived and the surcharge on the remaining three facilities—community centre/club, swimming pool and gym—from 3% to 2%. “This amounted to 6% surcharge. We have proposed to waive this surcharge altogether in group housing societies in the entire district,” Singh said.
The magistrate said the registry department has also noticed less registration of commercial properties, shops in markets and malls in Noida. “Most people rent shops in mall and markets. Earlier, investors had to pay 25% surcharge on registration of commercial properties with central air-conditioning and escalators. We have proposed to waive off this surcharge too,” he said.
The next significant move is decrease in circle rate of commercial property by 21.5% in Noida. This reduction of circle rate will be applicable for plots, floor purchase and freehold property.
“We have noticed difference in the considering amount (market price) and circle rates in commercial properties in Noida. There have been few takers of commercial property in Noida in the last few years. We feel the decrease in circle rate will attract more investors,” the DM said.
CREDAI-NCR president Pankaj Bajaj welcomes the surcharge waiver saying, “Additional facilities like swimming pool, community centre and gym are integral part of a group housing society. The administration should have done this long back. The administration should also reduce circle rate of residential sectors as the market price is lower in different sectors than the circle rates.”
However, no change was proposed in the circle rates for Greater Noida, Jewar and Dadri. The magistrate said that administration sees a positive transition in Greater Noida and Jewar. “The government is developing Jewar International Airport in Jewar and Dedicated Freight Corridor in Greater Noida. The Eastern Peripheral Expressway and Aqua Line Metro have also improved connectivity. We see a positive transition in Greater Noida and Jewar and hence there is no change in the circle rate there,” he said.
Buyers will have to continue to pay 5% stamp duty on parking—₹3 lakh for covered parking and ₹1.5 lakh for open parking.