Get­ting your prop­erty reg­is­tered?

The re­cent in­crease in cir­cle rates means that both buy­ers and sell­ers will have to pay more for stamp duty, reg­is­tra­tion and ap­pli­ca­ble taxes MIN­I­MUM LAND RATE FOR RES­I­DEN­TIAL USE

HT Estates - - HTESTATES - Su­nil Tyagi

Un­der­val­u­a­tion of prop­erty prices is a sig­nif­i­cant fac­tor con­tribut­ing to cir­cu­la­tion of black money and avoid­ance of stamp duty. In or­der to curb the men­ace of heavy un­der­val­u­a­tion of trans­ac­tions of im­move­able prop­erty, state gov­ern­ments reg­u­larly fix and re­vise cir­cle rates. Cir­cle rate is the min­i­mum rate for val­u­a­tion of im­move­able prop­er­ties for the pur­pose of cal­cu­lat­ing stamp duty. Cir­cle rates are taken into con­sid­er­a­tion by the com­pe­tent reg­is­ter­ing au­thor­i­ties at the time of reg­is­tra­tion of doc­u­ments re­lat­ing to trans­ac­tions of im­move­able prop­er­ties.

The Delhi govern­ment has once again re­vised the cir­cle rates un­der the In­dian Stamp Act, 1899, as ap­pli­ca­ble to Delhi and Delhi Stamp (Pre­ven­tion of Un­der­val­u­a­tion of In­stru­ments) Rules 2008 for prop­er­ties in Delhi. The re­vised cir­cle rates have come into ef­fect from Septem­ber 23, 2014, and have su­per­seded the cir­cle rates last pre­scribed by the Delhi govern­ment in De­cem­ber 2012.

The cir­cle rates which are ap­pli­ca­ble to a par­tic­u­lar prop- erty de­pend on var­i­ous as­pects. For in­stance, cir­cle rates dif­fer on the ba­sis of the pre­scribed us­age of the land/ prop­erty, which could be for res­i­den­tial, com­mer­cial, in­dus­trial or any other use. In Delhi, cir­cle rates are much higher for com­mer­cial and in­dus­trial land as com­pared to res­i­den­tial. Cir­cle rates also dif­fer on the ba­sis of cat­e­gory of lo­cal­ity where the im­mov­able prop­erty is lo­cated.

In Delhi, the gov­ern- ment has di­vided all lo­cal­i­ties into eight dif­fer­ent cat­e­gories, rang­ing from A to H. Each cat­e­gory has a dif­fer­ent cir­cle rate with more af­flu­ent ar­eas hav­ing higher cir­cle rates in com­par­i­son to the less de­vel­oped ar­eas. Within a year’s time, cir­cle rates in cat­e­gory A prop­er­ties have

in­creased from the pre- vi­ous rate of ₹ 6.45 lakh per square me­tre to the cur­rent rate of ₹ 7.74 lakh per square me­tre. Rates in other cat­e­gories, too, have moved up ac­cord­ingly (Re­fer to ta­ble for re­vised cir­cle rates for res­i­den­tial land in Delhi).

Cir­cle rates also pre­scribe the min­i­mum rate of con­struc­tion for as­cer­tain­ing the min­i­mum val­u­a­tion of built-up prop­er­ties (on per square me­tre ba­sis). These rates de­pend on the cat­e­gory of lo­cal­ity, the pur­pose for which the prop­erty is be­ing used — res­i­den­tial or com­mer­cial etc; the year of com­ple­tion of con­struc­tion and the qual­ity of con­struc­tion [whether pucca (per­ma­nent),

semi- to sub­mit an es­ti­mate of the to­tal cost of con­struc­tion, duly cer­ti­fied by an architect/civil engi­neer.

The con­struc­tion loan will be re­leased in parts, based on the progress of con­struc­tion. How­ever, you will have to bring in your con­tri­bu­tion in full be­fore the lender dis­burses the loan. The lender may also in­sist on send­ing its own tech­ni­cal per­son­nel to as­sess the progress of con­struc­tion or may de­cide to rely on cer­tifi­cates/pho­to­graphs sub­mit­ted by you.

Some lenders are not com­fort­able fund­ing self­con­structed prop­er­ties and hence, your choices will be lim­ited to that ex­tent. pucca or kutcha (tem­po­rary)].

Re­gard­ing flats in Delhi, the min­i­mum value of built- up rate de­pends on whether a flat is lo­cated in a Delhi De­vel­op­ment Author­ity(DDA)/co­op­er­a­tive/ group hous­ing so­ci­ety or whether a flat has been de­vel­oped by a pri­vate builder. Min­i­mum built-up rate for flats de­vel­oped by pri­vate builders is higher than that of flats in DDA/co­op­er­a­tive/group hous­ing so­ci­eties. Ad­di­tion­ally, the min­i­mum built-up rate for flats in build­ings with more than four storeys is greater than that of flats in build­ings that are up to four storeys high.

The new cir­cle rates may help cur­tail the cir­cu­la­tion of the black money com­po­nent in real es­tate trans­ac­tions in ar­eas where the mar­ket rate is higher than the cir­cle rate. How­ever, in ar­eas where the ac­tual mar­ket rate is lower than the cir­cle rate, this re­vi­sion will in­crease the

You will not be el­i­gi­ble for de­duct­ing the prin­ci­pal re­pay­ment por­tion as well as in­ter­est payable on the home loan un­less you own or co-own the plot.

I plan to buy a prop­erty auc­tioned by a bank from an agent. What pre­cau­tions do I need to take? Please ad­vise.

— Su­mit Sharma Be­fore you bid for any such prop­erty, please en­sure that the bank has ac­tu­ally taken over pos­ses­sion of the prop­erty. It is also ad­vis­able to find out cre­den­tials of the person whose prop­erty the bank is sell­ing so as to en­sure that you do not face any prob­lems af­ter you have pur-

stress on sale/pur­chase trans­ac­tions of prop­er­ties. An in­crease in cir­cle rates does not nec­es­sar­ily mean an equiv­a­lent pro­por­tion­ate in­crease in prop­erty prices and with this lat­est hike in the cir­cle rates, buy­ers and sell­ers will have to pay more for stamp duty, reg­is­tra­tion fee and ap­pli­ca­ble taxes.

The re­cent re­vi­sion in cir­cle rates shows that the 20% in­crease in cir­cle rates across all cat­e­gories/ lo­cal­i­ties has taken place with­out any in-depth study or re­search with re­spect to ac­tual mar­ket rates of prop­er­ties sit­u­ated in ar­eas fall­ing in dif­fer­ent cat­e­gories. chased the prop­erty, as the pre­vi­ous owner can cre­ate prob­lems for you in get­ting pos­ses­sion.

In case the prop­erty is un­usu­ally in­ex­pen­sive, there is high prob­a­bil­ity of there be­ing more le­gal is­sues. These prop­er­ties are sold on “as is where is” ba­sis and you should find out about so­ci­ety or other statu­tory over­dues on the prop­erty.

I would ad­vise you to in­volve a good lawyer be­fore you bid for any such prop­erty. It pays to be care­ful than land­ing in hot soup later.

Harsh Roongta is CEO, Apna Paisa. He can be reached at ceo@ap­na­paisa.com

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