Sluggish real estate market hits circle rates in Gurgaon

The Haryana Government has approved 15 per cent decrease in collector rates (circle rates) of property in Gurgaon in view of the sluggish real estate market.

It is for the first time in the history of the Millennium City, a premium real estate market, that the collector rates for property have actually been slashed. In the previous two financial years, 2014-15 and 2015-16, the collector rates were kept unchanged in the city. The city has been witnessing slow down in the real estate market for the past three years thus significantly reducing the property transactions and bringing down the revenue to the State exchequer.

The collector rate is the minimum value at which sale or transfer of a plot, a built-up house, an apartment or a commercial property take place. The buyers also pay stamp duty according to the collector rate.

Speaking to The Hindu, Deputy Commissioner T.L. Satyaprakash said that collector rates had been slashed 15 per cent almost across all areas and all types of properties, but the rates had remained unchanged for a few areas. He said that the exercise also involved rationalisation of collector rates in different areas and in some cases indexing was also done. “It also involved the process of rationalisation of rates. For instance, in some areas collector rates in Manesar and Sohna were higher than Gurgaon. It has been rationalised. Also commercial property rates from Ambience Mall to Sector 37 were uniform, those have been indexed,” said Mr. Satyaprakash.

Explaining the rationale behind the decrease in collector rates, Mr. Satyaprakash said that market rates had gone down but the collector rates were still high in most of the areas thus causing a dip in registries. “The buyers were opting for General Power of Attorney over Sale Deeds leading to revenue loss to the government. So there was a need to rationalise the rates,” said Mr. Satyaprakash. The new rate list will be available on official website of Gurgaon administration from June 27.

Though it's not the only factor responsible for the real estate market's existing problems the proposal to cut collector rates was a course correction in accordance with the ground situation, said a government official.

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