After hike, circle rates climb over market price

With the new circle rates announced recently, group housing residents of some Noida and Greater Noida sectors have complained they are unrealistic, saying the new rates are even higher than open MARKET rates, and urging the administration to slash them. The administration agreed to review their plea after the state stamps and registration department admitted some rates were indeed unrealistic.

Group housing residents thanked the UP government and the district administration for not hiking circle rates this year ? a huge relief for buyers of projects falling within 10km radius of Okhla Bird Sanctuary. Stand-alone and group housing plots in Noida, though, will become costlier by 5%.

They, however, lodged a plea with the Gautam Budh Nagar district magistrate to slash circle rates in group housing, in which the registry department charges 5% extra for each extra facility, such as swimming pool, club, etc, with an aggregate cap of 25%. "If group housing circle rate is Rs 55,000 per sq m, buyers end up paying Rs 67,500 per sq m (25% extra) for enjoying five or more extra facilities. "This was unjustified. We proposed that charges for extra facilities be curtailed, and slashing of rates in the commercial category by at least 10%," said a senior stamp and registration department official.

 " The department lists these facilities as luxury in group housing, but does not charge people who have such facilities on their freehold propertyfor the same . Today, these are considered basic needs, and these charges should be curtailed," said a resident.According to a real state expert, circle rates are anyway higher than prevailingMARKET rates in various Greater Noida sectors.

 "In many Greater Noida sectors like Chi, Pi, Zeta, Sigma and Eta, circle rates, at Rs 27,000 per sq m, are higher then market rates, which is between Rs 20,000 and Rs 25,000," said UVS Bhati, a real estate expert.

He added, "As a result, buyers have to pay registration rates based on circle rates, even though the property value is less than the circle rate. While buyers pay higher registration fees, their property lacks market value. Moreover, by paying higher registration rates, they come under the notice of the income tax department, so buyers are maintaining a distance from such deals," he added. Category D, which covers sectors 63A, 86, 106, 109, 112, 113, 116, 117 and 118 has registered a 5.47% hike, followed by Category A with 5.23%, covering posh sectors like 14, 14A, 15A, 17, 30, 35, 36, 39, 44, 50, 51 and 52. There is no hike in the economical Category E, covering sectors 66, 102, 115, 136, 141, 158 and 162, ostensibly to raise population density.

Sector 18 and 38A, with commercial plots categorised by plot size, saw a hike in circle rates this year. Rates for plots measuring up to 100 sqmts were raised by 19.36%, while plots between 100-1,000 sqm saw a 20% raise. Last year, the department raised circle rates by up to 30%, despite opposition. This year, Greater Noida Industrial Development Authority has announced a flat 10.21% hike in allotment price across all categories of land.

In recent years, unrealistic MARKETS rates have also hampered the stamp and registration department's targets. In response, the department proposed a reduction in circle rates in some residential and commercial categories. "Due to the steep hike, we're finding it difficult to achieve revenue targets, especially in group housing and commercial categories," said a senior UP stamps and registry official on condition of anonymity. According to assistant inspector general S K Singh, the department's 2014-15 revenue target for GB Nagar was Rs 1,695 crore. "The department achieved only Rs 300 crore, which should have been Rs 500 crore as per the recovery target," Singh said. The 2015-16 target has been fixed at Rs 1,875 crore.

SOURCE: Magicbricks.com