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The Haryana government has raised circle rates by up to 30% in prime real estate areas, such as those adjacent to the Southern Peripheral Road (SPR), Golf Course Road, and Dwarka Expressway. The revision, which also affects commercial hubs with a 10% increase, is unlikely to impact premium property prices but may make registries more expensive for homebuyers.
Circle rates, also known as collector's rates, represent the minimum value set by state governments for the transfer of various types of properties, including plots, built-up houses, apartments, and commercial properties. Builders are prohibited from selling properties below the established rates.
Although the revision will not affect marquee property prices, since market rates are significantly higher, it will directly impact plotted areas. Homebuyers may now need to pay higher stamp duties due to the increased circle rates. For instance, if the value of a property is Rs 1 crore, a buyer would have to pay Rs 7 lakh as stamp duty at a 7% rate. In the case of a 10% increase in the circle rate, the buyer would have to pay an additional Rs 1 lakh.
Property dealers have raised concerns about the circle rate revision, particularly in the context of the real estate market's struggles during the pandemic. Devender Kataria, a broker, pointed out that the circle rate and stamp duty are too high for the realty market, especially given the downturn experienced during the pandemic. Last year, circle rates in the same areas also saw an increase of up to 25%, although commercial sector rates remained unchanged.
The Haryana government's decision to revise circle rates is based on a "special review" of immovable properties in the district. The rates have been fixed in accordance with the categories under which areas are earmarked in the master plan, officials added.
Deputy commissioner Nishant Yadav confirmed to the press that the new rates have been uploaded on the government portal and will be applicable going forward. The rates in the agricultural, residential, and commercial categories and those for HSVP plots and licensed colonies in the tehsils of Gurgaon, Sohna, Wazirabad, Badshapur, Manesar, Pataudi, Farukhnagal, Kadipur, and Harsaru have been changed by 10 to 30%.
It is worth noting that the revised circle rates could also affect the loans extended by banks for property purchases, as they often rely on the government's circle rates to determine the property value. This change could potentially create further challenges for homebuyers seeking financial assistance.
In conclusion, the Haryana government's decision to raise circle rates in Gurugram's main housing hubs may result in higher registry costs and additional financial burdens for homebuyers. While the increase is not expected to impact premium property prices, it has raised concerns among property dealers, buyers, and financial institutions in the region. The long-term implications of this decision will depend on the government's ability to balance revenue generation with the needs of the real estate market and its stakeholders.
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