The rate in properties in Delhi is set to increase further after a 20 per cent hike in circle rates of properties across various categories of colonies. In a significant development, lieutenant Governor Najeeb Jung on Monday approved the hike in circle rate of properties by 20 per cent in all categories of colonies. This has been finalised at a high level meeting chaired by Jung.
The rates will be effective on all type of colonies and no recategorisation has been done as earlier proposed by the revenue department. A notification to this effect has been issued by Revenue Department. While doing so the Government has done away with the categorisation of posh and super posh colonies in the city, especially in South Delhi.
The circle rate is the minimum rate defined by the State Government at which a property can be bought or sold. Every locality has its own circle rate depending on its category as prescribed by the civic agency depending on infrastructure and other parameters.
Top sources told The Pioneer that with the hike of 20 per cent in circle rate of properties, the property rates will certainly increased despite slump in the real estate market in the national Capital. The revenue department has expected to raise Rs200 crore in next six months of the current financial year. There is a decline of 10 per cent-12 per cent in the revenue collection in stamp duty this year.
As per new notification, circle rate of category A, B, C, D, E, F, G and H colony is fixed Rs7,74,000; Rs2,45,520; Rs1,59,840; Rs1,27,680; Rs70,080; Rs56,640; Rs46,200 and Rs23,280. The circle rate of colonies is fixed on the basis of categorisation of colonies under nit Area Method.
It is felt that these rates are much lower than the actual market rates prevailing in these areas. The last circle rate revision happened in 2012 when the minimum rates for valuation of land and immovable properties were increased substantially. The circle rates for categories A and colonies was Rs6.45 lakh per square metre and Rs2.05 lakh respectively. The circle rate for C grade colonies was Rs1,33,200 per sq metre, Rs1,06,400 (D category), Rs58,400 (E category), Rs47,200 (F category), Rs38,500 (G category) and Rs19,400 for H category.
“For the flats having more than four-storey, a uniform rate per square meter of Rs87,840 will be taken as a minimum value of built up rate for residential purpose. Whereas in case where there same is used for commercial purpose, a uniform rate per square meter of Rs1,00,800 will be taken as a minimum value of built up rate for commercial purpose. For multi-storeyed flats by flats by private builders, a multiplicative factor should be applied,” the notification said.
According to notification, up to 30 square metre of flat (depending on plinth area), the minimum circle rate is fixed Rs50,400 per square metre for DDA flats while for flat having between 30 metre and up to 50 metre, the rate is fixed Rs54,480 per square metre. For flat having above 100 metre, the rate is fixed Rs76,200.
It is rampant practice for many property sellers and buyers to declare the value of transaction at a lower rate to get away with a lesser stamp duty payment. This leads to a huge loss in revenue for authorities and, thus, it has to be revised depending on the prevailing market rates.
Officials say that it has been done to avoid ambiguity in the circle rate and the proposed hike will be uniform. The lieutenant Governor gave his nod during a meeting with the Chief Secretary and the top officials of Revenue and Finance Departments. The proposal of circle rate of properties was put on hold after sharp differences between revenue and finance departments. This is yet another attempt to tame the black market, to rationalise registration in view of market rates and to enhance revenue generation of the State, which is now facing bad weather due to the economic slowdown.
For the Revenue Department, enhancing revenue generation is seems to be critical. The reason for the slump in collections is attributed to the market slowdown and fewer property registrations. The implementation of circle rate has been delayed due to finance and revenue department on the issue of recategorisation of colonies. The tussle between two departments reached to lieutenant Governor early this month.
The Arvind Kejriwal Government has constituted a seven-member committee, headed by Deputy Commissioner (West), for revision of circle rates — the minimum value of land and immovable properties — in the national Capital.