How do the falling circle rates affect you?
In the last week of June, Haryana government’s revenue department decreased the circle rates in Gurgaon. The new rates are now 15% lower in almost all areas of the city. This has been done for residential as well as commercial properties.
In January, the Uttarakhand government had reduced circle rates in various parts of Dehradun. In a few localities, the circle rates were almost halved.
Usually, circle rates only go up. Rarely do we see any reduction in them. However, almost all real estate markets across the country have been stagnant for the past few years and have been facing price depreciation. Experts believe that the decrease in Gurgaon’s circle rates is in keeping with the market needs. They also believe that some other states and cities could follow suit soon.
But how does a change in circle rates affect property prices? Let’s find out.
What is circle rate?
Circle rate is the minimum value at which a property can be registered in a new owner’s name. This rate is administered by state governments and is revised periodically. “Increasing or decreasing the circle rates is an administrative play to improve revenue collections from property registrations, or to give a boost to under-performing property markets,” said Anuj Puri, chairman and country head, JLL India.
Circle rates can differ among cities in the same state, and even among different areas of a city.