by THO
Buyers will have to pay more for registration of property in Gurugram starting December 1 following the district administration’s decision to hike circle rates by 10% to 30%. Luxury residential areas such as Golf Course Road are expected to see a 30% hike in circle rates.
Officials had said on November 29 that the circle rates will come into effect from December 1 and will be applicable at least till Mar 31, 2025. Deputy Commissioner Ajay Kumar, who announced the new rates on November 29, was quoted as saying that the new collector rates, also called circle rates, being implemented for residential, agricultural, and commercial land in the district have been increased by 10% to 30%, taking into account the market rate prevailing in respective areas.
Circle rate is the minimum price set by the government at which a real estate property can be sold. It is also levied on transfer of a house, plot, flat or commercial establishment. It is one of the major sources of revenue for the state government.
Will increase in circle rates impact Gurugram real estate market?
Any increase or decrease in the circle rates is done by the respective state authorities and is not linked to what happens in one particular city or state. Some states increase the rates marginally every year while some increase it twice a year. For instance, the circle rates – also known as collector rates in Haryana – are usually revised twice a year by the state government. In Mumbai it usually sees yearly change, explained Santhosh Kumar, Vice Chairman – ANAROCK Group.
“The current hike in rates will further increase the overall cost of property acquisition for homebuyers. Therefore, the hike may have some impact on the sales in the near future. Any sort of hike – be it interest rates, circle rates or basic property cost – directly impacts buyers,” he added.
Mohit Jain, Managing Director, Krisumi Corporation, is of the view that the real estate sector has been performing well, with various ancillary industries relying on it to drive overall economic growth. A robust real estate market is crucial for strengthening the economy. However, a hike in circle rates could discourage buyers from investing in properties, potentially slowing the sector’s momentum.
“At this juncture, an upward revision of circle rates may not be the most appropriate course of action. However, the decision may not lead to any substantial impact on the property market which continues to remain strong,” he added.
Others are of the view that the circle rate hike is unlikely to have a significant impact on Gurugram’s real estate market. “Gurugram’s real estate sector, which continues to thrive on strong fundamentals such as high demand, rapid infrastructure development, and rising incomes,” said Pradeep Aggarwal, founder & Chairman, Signature Global (India) Ltd.
“Prime areas like Dwarka Expressway, and Southern Peripheral Road are poised to maintain robust demand due to limited supply and sustained investor confidence. However, given the pivotal role of the real estate sector in driving economic growth and job creation, a balanced approach to policy changes, such as circle rate revisions, would ensure continued momentum and long-term sustainability,” he said.
