20% reduction in circle rate may be extended till Dec 31
NEW DELHI: The Delhi government’s current scheme of 20% reduced circle rates for all categories of properties, which was to be in effect till September 30, is likely to be extended till December 31, said a senior government official on Tuesday. Circle rates are the minimum price at which a property can be bought or sold.
The proposal for extending the scheme is awaiting approval of the cabinet, the senior official said, adding that the move is aimed at boosting the real estate market, which has seen a slump as a result of Covid-19, and increasing government revenue.
“The proposal for extending the policy till the end of the year will be placed before the next cabinet meeting, which is likely to take place on Thursday. The council of ministers is in favour of the decision; it will be approved by the cabinet,” said the senior official, asking not to be named.
On February 5, the Delhi government reduced circle rates for all categories of properties for a period till September 30. Circle rates were reduced by 20% for residential, commercial and industrial properties across all categories of localities.
Circle rates vary with each state and is revised from time to time depending on demand, supply and other development indicators pertaining to the area concerned.
Delhi broadly has eight categories of localities – from A to H – with Category A being the most affluent and Category H being the most economically weak. For instance, in a Category A locality, the circle rate for a residential property so far was ₹7,74,000 per square metre and for one in Category H locality was ₹23,280 per square metre.
Neighbourhoods such as Golf
Links, Vasant Vihar and Jor Bagh come under Category A, while localities such as Greater Kailash, Defence Colony and Safdarjung Enclave come under Category B.
Tagore Garden and Subhash Nagar come under Category C, while categories D and E mostly have localities that were notified as regularised in the past, some old areas where low-income and mid-income flats were developed and resettlement colonies.
Categories F, G and H comprise mostly unauthorised colonies in which residents have recently got the opportunity – through a central government scheme – to get their properties registered.
“A reduction of 20% in the circle rate essentially leads to reduction of around 1% in stamp duty, which is paid during the registration of a property. Real estate sector in Delhi witnessed huge slump due to the Covid-19 pandemic. Lakhs of construction workers lost their jobs. So, the decision was taken and it is evidently doing well. So, the government has decided to extend it by another three months,” said the senior official.
For registration, there is a stamp fee on the transaction value – which is 6% for men and 4% for women – to be paid by the buyer(s).
“In property transactions, people tend to show the transaction value as less on paper and essentially pay the registry fee, which more or less approximates the circle rate,” said a second senior official in the revenue department, asking not to be named.
In 2018-19, the Delhi government earned around ₹4,459 crore through property registries.
For 2019-20, the revised estimate was ₹4,897 crore and for 2020-21, the budget estimate was ₹5,297 crore, showed budget documents of the government.