As the Delhi government on Thursday (June 30) ended the 20 per cent rebate on the circle rate, there were apprehensions that property prices in the national capital would go up. Buyers would have to pay, with effect from July 1, 2022, actual circle rates as per the 2014 guidelines. What is the circle rate? Circle rates are minimum prices per unit area determined by the government. A property cannot be registered for a price below the circle rate for that area. Circle rates vary from state to state, city to city, and area to area. Circle rates are revised upward or down from time to time depending on factors such as demand and supply, amenities, profile of the neighbourhood, etc. In Delhi, the government has divided localities in categories from A-H, and has fixed a floor price for properties in each category. Affluent and posh localities such as Jorbagh, Vasant Vihar, Safdarjung Enclave etc., come under category A, while the least developed places — mostly located in Outer Delhi — fall under category H. In February 2021, amid the disruption caused by the coronavirus pandemic and lockdowns, the government relaxed the circle rate by 20%. As a result, the existing circle rate of properties in category A fell from Rs 7.7 lakh per square metre to Rs 6.2 lakh per square metre, and in category H, the floor price went from Rs 23,280 to Rs 18,624 per square metre. Newsletter | Click to get the day's best explainers in your inbox According to a senior Delhi government official, the end of the rebate regime will not affect real estate much, and property transactions will remain almost the same. However, the government's stamp duty collections will increase. What is stamp duty? Stamp Duty is payable at the time of registration of a property if it is acquired by way of Sale Deed/ Conveyance Deed/ Gift Deed. Stamp duty is payable at the rate of 6% of the consideration amount or the circle rate of the property applicable in the area, whichever is higher, if the property is registered in the name of a man, and 4% if it is registered in the name of a woman. Official sources said the Delhi government might increase the stamp duty to mop up more revenue. A proposal has been moved by the revenue department, the sources said. However, the process will require an amendment in the Stamp Act, and may take some time to come into effect, they said. The government hopes to mop up an extra Rs 700-800 crore through the increase in stamp duty, the sources said.
