Here’s a piece of exciting news for those looking forward to owning a property in the National Capital of India, Delhi. After almost a year of uncertainty and disruption, we see green shoots as the reality sector posted its best performance in the final year of 2020 due to the sudden upsurge in demand as the lockdown started to lift throughout the country.
These positive signs needed a substantial impetus from the government. To give that needed boost, the Delhi government recently announced a 20 percent reduction in the circle rates in Delhi across various categories, including – residential, commercial, and retail. The move is made to spur demand, help the sector come back on track, and reset its growth trajectory to pre-COVID levels.
What is Circle Rates?
For those unfamiliar with the real estate industry jargon, a circle rate is a minimum value below which a property’s sale cannot be registered. The circle rate varies from area to area. Usually, commercial properties have a higher circle rate than residential properties. The value also varies depending on the type of property and location; so, the apartment’s registration value in South Delhi will be different from plots and independent houses even in the same area.
The reduction of 20 percent in circle rates is expected to reduce the stamp duty or registration charges by 1 percent.
In Delhi, properties are categorized into eight categories from ‘A’ to ‘H.’ The ‘A’ class properties are in the posh localities. The least developed area properties fall into the ‘H’ category. As per the PTI reports, the current land rate is Rs. 7.74 lakh per sq mt for the ‘A’ category, which would go down to Rs. 6.19 lakh per sq mt after the revised circle rate. The circle rate will get slashed down from Rs. 23,280 to Rs. 18,624 per sq mt in the’ H’ category.
In a bid to “boost” the economy
The decision to reduce the circle rate by 20 percent for the next six months was taken during a Delhi government cabinet meeting chaired by Chief Minister of Delhi, Arvind Kejriwal. The decision of circle rate reduction was made official by Deputy Chief Minister Manish Sisodia on Twitter.
In his Twitter post, Sisodia wrote, “Circle rates of residential /commercial /industrial properties in Delhi reduced by 20 percent across all categories for next six months. It would be a big relief for people willing to buy the property and a big boost up for the real estate sector.”
CM Kejriwal retweeted Manish Sisodia’s post with a caption that the move is made to boost the post-COVID-19 economy. “While we are slowly recovering from the economic contraction of the post-COVID-19 era, the government must take all steps further to reduce the financial burden on the common man,” he said.
The revised circle rate with a 20 percent reduction will remain in effect till September 30, 2021. The rate is set by the state government’s revenue department or the local development authorities.