Circle Rate Hike Move Put On Hold; Rush If You Want A Home In Gurgaon

The ongoing slump in the real estate sector has also forced authorities to look for new ways to generate revenues — states earn a large part of their revenues through stamp duty and registration charges paid on property purchases. Since there has not been much activity in this area, the already cash-starved civic authorities are finding it difficult to cope with the added pressure.

It may be on that account that Haryana Chief Minister Manohar Lal Khattar had directed the Gurgaon administration to raise circle rates twice in a year. Circle rates are government-fixed rates below which a property cannot be registered.

Before we talk further about that it is worth mentioning here that it was a standard practice in Haryana to revise circle rates every financial year at an average rate of 10-15 per cent. However, in FY16, prevalent rates of FY15 were kept as it is, keeping in mind the slowdown. In FY17, the Gurgaon administration proposed a 15 per cent reduction in rates in an attempt to trigger activity in the real estate sector. It is also worth mentioning here that the Millennium City was among the worst-hit markets left deeply wounded by a slowdown that might now be on its way out. An annual report by PropTiger DataLabs show Gurgaon was the only city in 2017 among nine major cities of the country that registered a 55 per cent increase in new launches. Home sales in the city also increased 27 per cent.

Since things are looking up, authorities in early February came out with a decision to raise circle rates of several areas in the range of three to five per cent, two months before the start of the financial year 2018-19.

Property rates of some areas would have touched Rs 10,000 per square foot (psf) from the existing Rs 10,000 psf had the decision come into force. Average rate of property in the city is Rs 6,400 psf, data available with PropTiger.com show.

Rates were also decreased in some areas while for some areas as DLF-1 and Sushant Lok-1, they were kept unchanged. The revised rates across property segments were to come into effect on February 12, and would have been in effect till March 31 this year.

On February 9, however, the administration hurriedly issued a notice that the proposed hike has been put on hold. So, it may not be before April that rates may be hiked again. This may be the perfect time for those, who have been eyeing the city of malls with an intent to become its residents, to make their move.