Delhi government will not be extending the rebate of 20 percent on the circle rate of land and immovable property for another six months, making property transactions expensive from July 1 onwards.
A Delhi government order said on June 30 that the “Competent Authority has decided to discontinue the relaxation of 20% in circle rates beyond 30.6. 2022.”
Circle rates as notified under the 2014 notification shall be applicable from July 1, 2022, it said.
The Delhi government on December 31, 2021, extended the 20 percent rebate on circle rate for land and immovable property till June 30, 2022, to help Delhi’s COVID-hit real estate sector.
In September 2021, it was extended up to December 31, 2021. The extension of 20 percent relaxation in circle rate was to help Delhi's COVID-hit real estate sector.
Circle rates vary from state to state and are revised from time to time depending on demand, supply, and other development indicators of the area concerned.
The circle rates of properties in Delhi fall into eight categories of municipal areas--designated A to H. The circle rates or the official rates of land and immovable property were last revised in 2014. In June 2021, the revenue department formed four working groups to ascertain circle rate revision in residential, commercial, and industrial areas.
Real estate experts hoped the government will reconsider its decision.
"We hope the government will reconsider its decision on ending the circle rate rebate and increasing stamp duty on registration of property in Delhi. The home buyer is already hit by higher interest rates and rising costs of construction due to inflation and supply chain disruptions. This move to end the rebate and take stamp duty to as high as 8 percent is an additional hit," said Amit Goyal, CEO. India Sotheby's International Realty.
"Real estate and construction are a GDP accelerator and the need of the hour is to sustain the post-pandemic momentum, especially at a time when economic growth is under pressure.
"We have been requesting the Delhi government to complete the exercise of rationalising circle rates in Delhi, which are much higher than market rates in Category A colonies and lower in many others. That correction is also urgently needed," he added.
Property transactions may slow down in Category A colonies such as Panchsheel Park, New Friends Colony, Vasant Vihar, and May Fair Garden, said Rohit Chopra of Southdelhiprime.com