Circle rates slashed in Gurgaon

To give the much-needed a boost to sluggish real estate market, circle rates have been slashed by 15 per cent in Gurgaon effective Tuesday.

A committee headed by Deputy Commissioner TL Satyaprakash proposed the cut to bring circle rates in line with prevailing market rates. Higher circle rates were hurting the market badly because taxes have to be paid on the basis of circle rates. So, even if someone sold his flat at a rate lower than the circle rate, he had to pay capital gains tax at the prevailing circle rate. The same applied to buyers who had to fork out more for stamp duty. As a result, many people chose not to buy or sell property.

The Haryana Government’s notification to cut the circle rates is aimed at pulling the market out of this inertia.

Post-cut, circle rates for some prime residential areas like DLF Phase 1 and Sushant Lok will come down from Rs 77,000 per sq yard to Rs 65,450. Similarly, or DLF Phases 2, 4 and 5, it will drop from Rs 72,000 a sq yard to Rs 61,200.The rate, however, will be different for land which has seen change of land use (CLU).

Reacting to the development, Navin Raheja of Raheja Develpers was quoted in the media as saying, “This will reduce the overall cost as these rates are the basis for tax calculations. Raheja said this is a good move as property prices have dropped over the past couple of years, creating a gap between the transaction value and circle rates.