Circle rates revised,over two-fold increase

Chief Minister Sheila Dikshit said circle rates,or the minimum price at which you can sell real estate,have been increased to make them more realistic and closer to the prevailing market rates.

Circle rates were raised the most,by two-and-a-half times,in upscale colonies. The least impact would be felt in the low-end colonies,where rates were increased by only a sixth,officials said.

“The intention behind revision and rationalisation of the circle rates is not only to increase the revenue,but also to bring transparency in property deals,” Dikshit said after the Cabinet meeting,which approved the hike.

The new rates will be applicable once the government notifies the increase next month,an official said.

Circle rates were doubled this February across the eight categories in which Delhi is divided,and the rates in upscale colonies have now collectively increased five times since that month.

Dikshit said the growth of the real estate market and instances of under-valuation of property transactions pushed the government to introduce the concept of circle rates in July 2007.

“The first revision was due in 2009,after two years,but it was enforced only in February this year. The revision cycle is of two years,so we had to increase the rates twice this year to clear the backlog,” Dikshit said.

Dikshit said despite the increase,circle rates in Delhi will remain less than the prevailing market rates in the city and also less than the circle rates in Gurgaon and Noida.

She said the government would be able to generate an additional revenue of Rs 800 crore annually due to the increase in collection from property transaction through stamp duty and registration fees.

Revenue officials said the government hiked the rates as in most cases the actual rates of properties are not shown on paper,due to which the government suffers loss in revenue in stamp duty and registration fees.