What is Circle Rate?
The minimum value at which the sale or transfer of a plot, apartment, house, or commercial property occurs is known as Circle Rate. This rate is set up by local authorities or the state government’s revenue department.
The circle rate is in line with what the state government officials perceive as prices at which property sale or transfer should be undertaken.
What is the move taken by Delhi Government?
The Delhi Government has reduced the circle rate for all the real estate sectors by 20% which include Residential, Commercial, and Retail for the next six months starting from the 5th of February 2021, to provide relief to the real estate sector affected by the COVID-19 pandemic.
The decision was taken at a cabinet meeting headed by Chief Minister Arvind Kejriwal. Chief Minister said, “While we are slowly recovering from the economic contraction in the post-COVID era, it is the duty of our government to take all steps to further reduce the financial burden on the common man.”
According to reports of CNBCTV18 Deputy Chief Minister of Delhi Manish Sisodia also tweeted that the decision for the Real Estate Sector will be a big relief for people willing to buy properties in the national capital.
Which Sectors will be Affected Most?
The real estate sector of Delhi is divided into various categories and the Circle Rate also varies according to the market value of the area and the facilities that are available in that area. Real estate experts at Moneycontrol say it will improve the market and will help increase the number of property transactions. The reduction of 20 percent in circle rates is expected to reduce stamp duty or registration charges by 1 percent.
Delhi government has divided the properties in entire Delhi city into 8 categories – Category A, Category B, Category C, Category D, Category E, Category F, Category G, and Category H. The most expensive posh areas of the city are part of Category A while Category H has the lowest value areas of the city. Hence, the Circle Rate also varies accordingly.
Reduction in circle rate even if it’s for only 6 months will indeed boost the buying and selling activities in the real estate sector across the capital, especially in the grade-A category market.
The step taken by Delhi Government at this crucial juncture may also encourage other states to do take similar steps which will eventually boost the activities in the Real Estate Sector.