Gurgaon To Keep Circle Rates Unchanged Till March 2021
A move that would have a positive impact on the affordability of properties, the Gurgaon district administration has decided to leave the circle rates unchanged for the second half of the financial year 2020-21. This means, a status quo will be maintained on circle rates till March 31, 2021. As a rule, the Gurgaon district administration revises the circle rates of properties twice in a year to match them with the market rates of properties.
Recall here that circle rates are the government-specified rates below which a property cannot be registered at the time of change of ownership. Stamp duty for a transaction, which is one of the biggest revenue-generators for states, is calculated based on the circle rates of a specific locality. Earnings thus made, account for a large portion of the district administration’s annual income. Stamp duty for property purchase in the city is eight per cent of the transaction value for men and six per cent for women.
Market rates, on the other hand, are the prevalent real estate values in a specific locality at a specific point of time. This is basically the rate at which similar properties are bought and sold in a particular housing market.
In the past, Gurgaon real estate has earned the tag of being among the most expensive real estate markets in the National Capital Region, a key reason why this city remained among the worst-affected housing markets during a nation-wide slowdown, which has been worsened by the Coronavirus pandemic. Despite seeing some correction in the past, average rates of properties in Gurgaon stood at Rs 4,890 per square foot.
Meanwhile, the developer community, which has been expecting the government to reduce circle rates, in order to boost buyer sentiment in a market where housing numbers have been on a falling spree, has shown strong displeasure over the move.
How does this change housing affordability?
While average rates of property continue to be high in Gurgaon, buyers can currently avail of the benefits offered by a majority of developers in the region, including discounts on purchases. These discounts are primarily aimed at restoring some normalcy in buyer sentiments, after the virus spread brought housing markets across the country to a halt. Buyers can currently enjoy waivers on GST and stamp duty payments while also booking homes at low booking amounts.
Builders in the city have an unsold stock of 31,800 units (data as of June, 2020). This means, buyers have a great opportunity to book ready homes at discounted prices. Those applying for a housing loan can also avail of low interest rates, as these are currently hovering at below the 7% level.