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'New circle rates in Delhi higher than market value'

NEW DELHI: Some real estate experts have said the new circle rates, or the minimum valuation at which a property can be registered with the government, are higher than the market value in a few areas. 

The revised rates, which came into effect on December 6, are 200 per cent higher in Category A colonies, 50 per cent in Category B areas, and 22 per cent in the other colonies. 

In the first big deal, involving a bungalow on central Delhi's KG Marg, the buyer had to pay stamp duty at 770,000 per sq yard, which, according to experts, is more than double the existing property rate of about 300,000 per sq yard. 

The 18,670-sq ft, over 70-year-old bungalow owned by the Sardar Ujjal Singh Family Trust and the family of Sardar Mohan Singh, was bought by Ambience groupowner Raj Singh Gehlot for Rs 136 crore. 

"The price in this area is much lower than the new circle rate," said Santhosh Kumar, chief executive officer, operations, at Jones Lang LaSalle India, one of the real estate firms that advised the deal. Gehlot, who bought the property in the name of two family members, said because of the new circle rates, he had to pay much higher stamp duty and registration charges, which collectively came to about Rs 12.5 crore. 

"Clubbing areas as varied as Lutyens Bungalow Zone and central Delhi with Golf Links, Vasant Vihar andShanti Niketan, where per sq yard rates are much higher because of smaller plot sizes and permission for higher ground coverage, has created this anomaly in the market," said Jaiwant Daulat Singh, director of Daulat Singh Consulting, another firm that advised on the transaction along with Mine & Young Advocates & Legal Consultants and Jones Lang LaSalle. 

The situation is the same in areas like New Friends Colony, Friends Colony and Maharani Bagh, where experts say the market rate does not exceed 400,000 per sq yard but buyers will have to pay stamp duty at the rate of 770,000 per sq yard. 

The revised circle rate for Category A areas is 770,000 per sq yard, compared with 260,000 per sq yard earlier. The neighbourhoods of Greater Kailash, Defence Colony, Gulmohar Park, Panchsheel Enclave, Anandlok, Green Park, Golf Links and Hauz Khas are among the areas under this category.