Delhi hikes minimum property rates

For the second time this year, the Delhi government announced a steep hike in circle rates in a bid to garner more revenue and check the use of black money in property transactions. Circle rates are the government’s valuation of land in the city — differentiated into eight categories, A to H — below which a realty deal cannot be registered. After doubling the circle rates in February this year, the government on Monday further revised the rates with a hike in the range of 15% to 250%. The new circle rate regime is unlikely to affect real estate prices in the city. If anything, the hike may result in a price correction in certain areas as the black money component in property deals comes down. Property analysts said even the revised rates were much below real property values in the city. The city government expects the revised rates to bring in additional revenue to the tune of Rs 800 crore annually. Chief minister Sheila Dikshit said the revision was an attempt to bring circle rates closer to real property prices, although these were still lower than market values in many posh colonies. According to senior revenue department officials, in most cases, the actual rates of properties are not shown on paper due to which the government suffers loss in revenue in stamp duty and registration fees.