Delhi: Circle Rates Hiked

What is Circle Rate?

Circle rate is the minimum rate for Government valuation of a plot, independent house, or flat in a particular area or locality. The circle rates are decided by the State Revenue Ministry. The circle rates for sale and purchase of properties in a particular area are finalized considering the available infrastructure and other parameters.

How it works?

Please note that the properties in the market are sold on actual market prices. So, it is the demand and supply of a property in that area that drive the actual market price. Circle rate of a property is just a pointer of property prices. The significance of Circle Rates is as follows:

  • Higher circle rates means higher revenue for Government on property transactions
  • Higher circle rates means lesser problems in raising higher home loans, as banks or mortgagers typically use circle rates as a gauge of the property prices in almost all places.

Recently, 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. It may result in rise in property prices but some experts say that it is unlikely. Usually, the properties in Delhi are registered at the circle rates. Therefore, the stamp duty and registration fee, which is calculated as a percentage of the registered price of a property, will increase now.

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.


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