Real Estate
Property will become expensive in Noida: Proposal to increase circle rate by 30%, if approved, burden on investors will increase by 3%
Noida: A proposal has been prepared to increase circle rates for Noida region by 25 to 30 percent in residential areas and 10 to 15 percent in other areas. If the circle rates increase by 30 percent after the stamp and registration department approves this proposal, then the cost of owning a house in Noida region will also increase by 3 percent.
Circle rates have not changed for 5 years
Assistant Inspector General Shashi Bhanu Mishra said that the Stamp and Registration Department has sent a proposal to the District Officer to revise the rates. Property prices in Noida and Greater Noida have increased continuously, but no change has been made in the circle rate since 2019. Due to which there has not been much increase in the revenue received by the department even after the purchase and sale of property. To increase the revenue, the circle rate should be changed.
This is the circle rate
The circle rate is the minimum valuation rate at which any property can be sold. This is why it is often referred to as the guidance price for properties, so developers usually set their prices in accordance with the circle rate. The government uses the circle rate to determine the amount of various charges, fees and taxes associated with property transactions. These mainly include stamp duty. The stamp duty levied on the transfer of property is calculated on the basis of circle rate. At the same time, the fee charged for registering the property transaction is also determined by the circle rate. It is usually a percentage of the circle rate of the property. Apart from this, the fee charged for the transfer of ownership of the property is usually based on the circle rate. This fee is applicable only on re-sale properties.
Circle rate affects resale in this way
If a person buys a 500 sq m property in Noida as resale and the circle rate of this area in Noida is Rs 47,000 per sq m. If the transfer charge is 2 per cent of the circle rate, it comes to Rs 940 per sq m. In such a situation, a total of Rs 4,70,000 should be paid as transfer fee for this resale property. If a 30 per cent increase is implemented in the circle rate of the Noida area, then buying a pre-owned home may require paying about 3 per cent more.
Let's understand the complete math
In case of an increase in circle rate, the baseline rate of a property will increase and the stamp duty and registration fee will also increase. It can be understood like this that a 2 BHK house with 1,000 sq ft area somewhere in Noida is a resale property in Noida, where the price should be Rs 5,000 per sq ft. Therefore, the property will be worth Rs 50 lakh. If we assume that the circle rate is also Rs 5,000 per sq ft, stamp duty is 7 per cent, registration fee is 1 per cent and transfer fee is 2 per cent, then the calculation will be as follows. Stamp duty will be Rs 3.5 lakh, registration fee will be Rs 50,000 and transfer fee will be Rs 1 lakh. In such a situation, the total cost of transfer of resale property will be Rs 5 lakh If the circle rates increase by 30 per cent, then the stamp duty will be Rs 4.55 lakh, registration fee will be Rs 65,000 and transfer fee will be Rs 1.3 lakh. The total cost of transfer of property will be Rs 6.5 lakh. In such a situation, the transfer of re-sale property will increase by about Rs 1.5 lakh which is 3 percent more than the old value of the property of Rs 50 lakh.