In order to value property more realistically, Delhi government will create 32-odd subcategories under the existing eight categories of properties designated as A to H that determine circle rates.
The circle rate for all the existing categories was last revised in 2014, and a re-evaluation exercise was going on to revise the circle rates to better capture the change in the value of the properties due to infrastructure development, commercial activities in nearby areas, better public transport facilities, etc.
The state government’s evaluation committee has recommended the creation of 4-5 subcategories for each of the current categories. At present, the categorisation is broad and encompasses large areas. There is also a huge difference in the circle rates between succeeding categories. For example, in the A category, the rate is Rs 7,74,000 per square metre, while that for B category is Rs 2,45,520 per square metre. The formation of subcategories will make the rates more realistic and more correlated to the prevailing market value.
The committee has submitted its report on the recommended revision of the circle rates to the government’s revenue department, which will review it and take a decision. It is probable that the rates will go up by 25%.
Properties in A category, such as Greater Kailash, Vasant Kunj and New Friends Colony, are the costliest while those in the H category, such as Kalyanpuri and Nand Nagri, attract the lowest circle rates. Circle rates are the minimum values of lands and properties below which a property cannot be registered. The circle rates also determine the stamp duty and property registration charges that accrue to the state government.
Explaining the need for the subcategories, a revenue official said that the market rates of properties even within a given category was found to be varying widely due to new factors like infrastructure development, proximity to Delhi Metro network and overall commercial development. The official elaborated, “For example, even within the lowest H category, it is not uncommon to find some areas having far a higher property value than even one in the higher G category because a new metro station has come up nearby or the traffic congestion has reduced due to the construction of a flyover.”
Another official said that the recommendations of the evaluation committee would be reviewed at the ministerial level and then be forwarded to the cabinet for approval. After it is cleared, the recommendations will be sent to the lieutenant governor for consideration and approval. After the LG’s approval, a notification will be published and the new circles rates will be implemented.
Since the Aam Aadmi Party took power, the circle rates have never been revised and this will be the first act of its kind for the current government. While the revision will likely make property owners happy, the government can also expect higher stamp duty revenues.
The state government periodically revises circle rates for properties, and most such exercises usually raise the land rates. A re-evaluation exercise may increase the rates uniformly across the categories or by varying percentages for each different category.