Kolkata property buyers face sticker shock as circle rates surge up to 90%

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Property buyers across Kolkata and its adjoining areas are facing significantly higher costs. This follows a major revision of government circle rates that came into effect on Wednesday.

The West Bengal finance department has increased these minimum valuation rates by 15% to 90%. The move directly increases the stamp duty and registration fees payable on all property transactions.

What are circle rates?



A circle rate is the minimum price set by the government for registering a property sale. It is the value on which stamp duty and registration charges are calculated. The state government, as reported by TOI, had not revised these rates for seven years.

An official from the finance department justified the hike. They stated it was necessary to address a growing gap between official circle rates and actual market prices.

“There are instances of properties being sold and bought at Rs 9,000/sq ft when the circle rate is Rs 6,000/sq ft. We have addressed this variance through the revision,” the official was cited by TOI as saying.

Developers voice strong opposition



The massive upward revision has drawn sharp criticism from real estate developers. They argue that the new rates in some areas are unrealistically high and could suppress market demand.

In Mahishbathan, on the edge of Salt Lake, the circle rate has skyrocketed by 87% to Rs 12,065 per square foot. This new rate is now higher than in established areas like Tollygunge.

In BT Road, Baranagar, a hub for new high-rise projects, the rate has nearly doubled. It has jumped from Rs 4,708 per square foot to Rs 8,850.

The buyer’s pinch



For most homebuyers, the immediate impact is a heavier financial burden. In Kolkata and other urban areas, stamp duty is 6% for properties below Rs 1 crore and 7% for those above it.

Due to the revised circle rates, the government valuation of most three-bedroom units and even some two-bedroom apartments will now exceed the Rs 1 crore threshold. This pushes them into the higher tax bracket.

Tax implications and industry concerns



Sushil Mohta, president of Credai West Bengal, pointed out a critical issue. He noted that in some areas, the new circle rates now exceed the prevailing market price.

“There is no issue where the circle rate has been revised to be at par with market price. But if the circle rate is higher, then there is income-tax implication,” Mohta said.

In such cases, both the seller and buyer could be liable to pay income tax on the difference between the circle rate and the actual transaction price.

Apurva Salarpuria, president of Credai Kolkata, expressed disappointment that the industry was not consulted. Saket Mohta, managing director of Merlin Group, warned that a mismatch between circle and market rates makes transactions difficult to conclude. He cautioned that this could eventually hurt the government's own revenue from stamp duties.

Market reaction and a contrasting view



As cited by TOI, Biplab Kumar of NK Realtors suggested that sellers in affected localities may be forced to increase their asking prices to match the new government benchmark. He predicted a short-term dip in sales as buyers come to terms with the increased overall cost of purchase.

However, a contrasting perspective was offered by Knight Frank India’s Vivek Rathi. He pointed to robust data showing Kolkata’s home registrations grew 37% year-on-year between January and August 2025.

This growth occurred even after pandemic-era rebates on stamp duty were rolled back last year. In this positive backdrop, Rathi suggested the circle rate hike may have a limited long-term impact on sales volumes. He stated that buyers are primarily driven by market prices, affordability and the desire for homeownership.

The full effect of this significant policy change will become clear in the coming months as the market adjusts.