Delhi to implement new circle rates to bridge gap between market prices and property valuation
Also, farmhouses, especially in South Delhi's urban belts, will reportedly come under the revision. As per reports, properties there routinely sell at extremely high prices, and they host commercial-scale events like weddings, and also act as luxury residences.
New Delhi: For the first time in over 10 years, Delhi is reportedly going to implement a major circle rate overhaul, as the government aims to align valuations of property with real market prices. The important proposals that are being discussed include a new A+ category for Lutyens' Delhi, pricing based on location, a complete reworking of farmhouse valuations, and a review system that will align the rates with fluctuations in the market.
Why is the new A+ category?
According to a report by the Times of India quoting a senior official, the A+ bracket is being mulled as several localities in Lutyens' Delhi, where real estate prices often surpass the highest notified rates, is presently in Category A, not reflecting their vastly higher market value.
Also, farmhouses, especially in South Delhi's urban belts, will reportedly come under the revision. As per reports, properties there routinely sell at extremely high prices, and they host commercial-scale events like weddings, and also act as luxury residences, with the rates of those properties being severely mismatched.
As per the new proposals, the rates of the farmhouse would be determined based on location and benchmarked to prevailing real estate values. According to experts, the mismatched prices have long cost the government substantial revenue. Notably, in the national capital, the circle rates for residential or commercial properties were last revised in 2014, and when it comes to agricultural land, the last revision happened in 2008.
In many high-profile colonies in the city, the circle rates are significantly lower than market prices, which have resulted in lower collections of stamp duty, large cash components in deals, and artificially low property valuations on paper.
How many categories are there in Delhi right now?
At present, Delhi has eight categories from A to H. In Category A, the rate is Rs 7.74 lakh per sqm, and it ranges to Rs 23,280 per sqm in Category H. But the levels of development within the same category vary widely, with massive differences in real estate prices, civic amenities, and infrastructure.