News: 10% cut in circle rates will boost realty market in Gurgain, say builders-13-01-2021
Gurgaon: Citing the sluggishness in the realty market, city-based home developers have demanded a 10% cut in the proposed circle rate and stamp duty relaxation. They claim the circle rates in Gurgaon are already very high and may prove detrimental for the realty sector if the government doesn’t extend support to builders.
The circle rate or collector’s rate is the minimum value that state governments have set for the sale or transfer of a plot, built-up house, apartment or commercial property. Income tax law does not allow builders to sell flats and homes below circle rates.
Ramesh Singla, president of Gurgaon Home Developers and Plot Holders Association, told TOI that he recently met deputy commissioner Yash Garg and requested him to reduce the circle rates in order to boost Gurgaon’s real estate market, which is struggling post-Covid. “If the circle rate is lowered, it will make transactions more profitable for homebuyers as well as developers,” he said.
In plotted areas for instance, there is a direct benefit to consumers. If the property is of Rs 1 crore value, the buyer has to pay 7% stamp duty, which is around Rs 7 lakh, in case of a 10% cut the buyer would save around Rs 1 lakh. “The current circle rate for floors is Rs 5,500 per sq ft and the proposed circle rate is Rs 6,500 per sq ft. The proposed circle rate and the stamp duty are too high for the realty market amid Covid,” said Singla.
Naresh Yadav, another developer and vice president of the association, said, “In the wake of the pandemic, other state governments have already reduced the circle rate and stamp duty but the Haryana government has not yet granted any relief to developers and homebuyers.”
He also said the proposed as well as the current circle rates of basements are too high in the city, “because it is free from the floor area ratio (FAR) with no right on land”.
