A significant setback is on the horizon for those considering buying a house or land in Gurugram, which borders Delhi. The district administration has proposed a substantial increase in the government-determined prices, or circle rates, for properties and land in the city. If this proposal is approved, property purchases in the area will become significantly more expensive for buyers.
Recommendation for up to 77 Percent Increase in Circle Rates in Residential Areas
In several premium residential areas of Gurugram, such as DLF Phases I to V, Sushant Lok, South City, and Golf Course Road, a 10 to 20 percent increase in circle rates has been recommended. Additionally, there is a proposal to increase circle rates by up to 10 percent in DLF's luxury societies, including Aralias, Magnolias, and Camellias.
Currently, the circle rate in these societies is ₹35,750 per square foot, and the proposal suggests raising it to ₹39,325 per square foot. Given that market rates in these societies are already above ₹55,000 per square foot, the administration believes it is necessary to bring the circle rate closer to the actual market value.
Significant Jump in Sectors Near Dwarka Expressway
The circle rates in Dwarka Expressway and its surrounding new sectors, which are among the fastest-developing areas in Gurugram, are proposed to increase by up to 62 percent. Currently, the circle rate here is ₹40,000 per square yard, and there is a proposal to increase it to ₹65,000.
There are also plans to increase the circle rate for plots in villages by up to 77 percent. For example, in Gurugram village, the circle rate is proposed to increase from ₹25,300 per square yard to ₹45,000.
Largest Proposed Increase on Agricultural Land
This time, agricultural land is expected to be most affected. The administration has recommended increasing the circle rate for agricultural land in Bajghera village from ₹2 crore per acre to ₹5 crore per acre, which represents a 145 percent increase. Similarly, in Sirhaul village, the rate is proposed to increase from ₹2.39 crore per acre to ₹5 crore, a jump of 108 percent.
Reasons Cited by the Administration for the Increase
The district administration states that the current circle rates are significantly behind market rates. This affects the revenue the government receives from stamp duty. Additionally, tax evasion occurs in many property deals by underreporting the actual transaction value. Officials believe that when there is a significant difference between the government rate and the actual market rate, both buyers and sellers use it to their advantage, causing substantial losses to the government.
According to the administration, increasing the circle rate will increase transparency in real estate, stop tax evasion, and increase government revenue. However, this will result in buyers having to pay more stamp duty, and sellers may also have to pay more in the form of capital gains tax.
Circle Rates Will Still Be Lower Than Market Rates
However, the proposed rates are still lower than market rates. Property market experts say that market rates in many high-end locations in Gurugram are 30 to 60 percent higher than government rates. Thus, even if the administration increases the circle rate, it will not reach the market rate.
Nevertheless, it will still cost more to register property, and property investment may now prove to be more expensive than before. This change could be significant for investors.
What is the Next Step for the Government Proposal?
The report on the proposed increase in circle rates by the administration will now be sent to the Haryana government. After receiving approval from there, it will be implemented. Circle rates are usually reviewed annually, but in a rapidly growing city like Gurugram, updating these rates over time is considered essential.
