This State Govt Slashes Circle Rate For All Real Estate Properties By 20%! How Will This Impact Buyers?
In an attempt to boost the revenue, on Friday Delhi government reduced the circle rates on real estate property for the next six months. This will be applicable for all the eight categories of the locality including the high-end properties to even the cheapest one. According to experts, this decision will uplift the real estate market which will, in turn, generate revenue for the government.
What Are The Current Circle Rates In Delhi?
In a cabinet meeting conducted on Friday, the government reduced the circle rates by 20% for all kinds of real estate and all types of localities. Circle rate is the minimum designated price per unit of land (sq ft) at which property transactions are carried out.
The new circle rates will be applicable for the next six months on commercial, residential as well as industrial property in all the A to H categories that all the localities of Delhi are divided in. Category A to category H represents the most expensive to most affordable localities respectively.
Why Is Circle Rate Reduced?
According to a statement released by Chief Minister, Arvind Kejriwal, this decision will revive the real estate market from the blows of a pandemic. Reducing the circle rate by 20% is equivalent to cutting down the stamp duty by 1%. This will give more purchasing power to the people and they will engage in property transactions creating new employment opportunities.
The economy and overall real estate market hit the bottom because of the emergence of Covid 19 pandemic. Lakhs of people lost their jobs and the construction sector was no exception. Though the Delhi government had directly given Rs 10,000 to all these workers in the form of monetary relief, the new decision will ensure a long term recovery of the real estate market.
What Are The Current Real Estate Prices In Delhi?
Every state updates the circle rates regularly considering changes in demand, supply, and development indicators in a certain area. In Delhi, currently, the circle rate for residential properties for localities in category A like Golf links, Vasant vihar, and Jor Bagh is Rs 7,74,000 per square meter, and that for category H is Rs 23,280.
The current stamp duty that buyers are supposed to pay during registration is % for men and 4% for women.
What Are The Previous Trends Of Real Estate In Delhi?
The earning from real estate in 2020 was estimated to be around Rs 5,297 crore as mentioned in the budget. However, the actual earning was just Rs 1,860.57 crore from April to November last year as compared to Rs 3,258.47 during the same period in 2019.
The total earning of the Delhi government from real estate was Rs 4,459 crore in the year 2018-19 and that for 2019-20 was Rs 4,897.
What Is The Reaction Of Industry On Delhi Government’s Decision?
The executive director of Knight Frank, Mudassir Zaidi encouraged the decision saying, “This decision by the Delhi government would significantly contribute to the market’s revival by boosting the volume of transactions, especially in the most affluent colonies in Delhi where market rates of properties had dropped below circle rates. The government’s decision is capable of rectifying such anomalies in the system.”
Ritesh Mehta, senior director at JLL, a commercial real estate services company said that it was a positive move. According to him, this decision will impact category A more and result in an increase in luxurious transactions.