The local government’s move to cut circle rates by 15% has brought cheers to buyers looking to invest in Gurgaon real estate market.
Circle rates have a significant impact on prices. The stamp duty that the buyer has to pay is in accordance with the circle rates. A reduction of circle rates would help the buyer in saving on the stamp duty and registration fees. Circle Rates are the rates set by the government at which a property can be sold. These rates become the minimum applicable rates as well. All stamp duty calculations have to take into account, the prevalent circle rates in the area.
A major factor taken into account for fixing a circle rate is the demand and supply of property. The prevalent market rates also influence the government’s decision. Apart from this, the government may decide according to its own policy what it perceives the circle rate should be.
Gurgaon property market has been for some time now, a buyer’s market. This rate cut further underlines that fact. The cut in circle rates will also increase the numbers of end users buying homes. Builders too will benefit by the positive sentiment building up in the market. Another point to note is that the circle rates have been slashed for commercial areas too. This will provide a much needed stimulus to commercial real estate in Gurgaon.
Gurgaon will have a unique edge over the other NCR regions. In most of the other regions, prices are going up, circle rates are being revised. Now it seems, authorities in other cities will have re-think their strategy on circle rates. Noida seems to be doing it already as new circle rates are usually announced in August every year. The industry is hoping for a positive sentiment from Noida as well.
Speaking to First Post, Vivek Agarwal, Co-founder and Principal Partner, Square Yards said “This step towards lowering circle rates should be seen in context with the affordable housing push by the government. In North India, Gurgaon leads in the affordable housing segment, with maximum launches happening in this space. The government has already taken a lot of measures to promote affordable housing and this seems to be one of them.”
“This is the first time in the past ten years that the circle rates in Gurgaon have been reduced. Otherwise, each successive year we have seen a rise of at least 10%. Last year, the rates were kept unchanged and rates applicable for 2014-2015 were carried over to 2015-2016.” He further added.
