With a slump in the real estate market, higher collector rates in both commercial and residential categories in Chandigarh have put buyers in a quandary. The collector rates in various parts of the city are even higher than the actual market value of properties.
Sample this: In Industrial Area, the market price is Rs 45,000 per square yard, while the collector rate is Rs 82,368 square yard. For a plot measuring 500 square yard, one has to pay around Rs 4.11 crore as collector rate, whereas the prevailing rate of the property is Rs 2.25 crore.
Similarly, the collector rate of showrooms in sectors 8 and 9 is around Rs 18.66 crore, while the property prices hover around Rs 17 crore. The collector rate of commercial properties in Sector 34 is around 19.50 crore, while the market value of the properties is around Rs 17 crore. In Sector 22, a buyer has to pay around Rs 15 crore as collector rate for a property having a market value of Rs 13 crore.
The current price of a one-kanal house in the northern sectors is around Rs 6 crore and the collector rate is around Rs 4 crore.
In addition, buyers are required to pay a stamp duty of 5 per cent and 3 per cent on collector rates for commercial residential properties, respectively. They are also charged Rs 1,500 per square yard as construction charges.
The administration had increased the collector rates by 10 per cent in 2012 in different categories, while in 2013, the rates were increased by up to 50 per cent.
According to experts, the gap between the value of property and collector rates further widened due to a fall in property prices in the last two years.
President of the Property Federation of Chandigarh Kamaljit Singh Panchhi said that the Greater Mohali Area Development Authority (GMADA) and Haryana Urban Development Authority had reduced the collector rates in Mohali and Panchkula, respectively. He said that the market was down by around 40 per cent.
“Going by the current trend, property prices are going to come down, which will further increase the gap between the prevailing market rates and collector rates,” said Panchhi.
UT admn mulling reduction
The administration is mulling reduction in collector rates and a survey was conducted to identify areas where the rates are disproportionately higher than the property rates. Currently, the collector rates in Chandigarh are considerably higher than that of Panchkula and Mohali. Chander Verma, chairman of Converted Plot Owners Association, said that considering the current scenario, the administration should slash collector rates. Despite repeated attempts, Deputy Commissioner Ajit Balaji Joshi was not available for comments.
No auction since 2009
Due to a slump in the market, the UT estate office has not held auctions since December 2009. The last auction saw the average price for residential sites shoot up to Rs 74,820 per square yard, while prices for commercial sites went up to Rs 2.74 lakh per square yard. In 2010, the administration had planned an auction, but it was cancelled at the last moment.