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Gurugram Circle Rates to Increase by 10-30% from December 1: Implications for Property Buyers

Team Opulnz Abode, 2-12-2024, 15:34, Read Time – 1.5mins

Starting December 1, Gurugram’s property registration costs will significantly rise, with circle rates increasing by 10% to 30%. The district administration’s move is set to impact luxury areas the most, with upscale locations like Golf Course Road facing the steepest hikes.

What Are Circle Rates?

Circle or collector rates are the government-determined minimum prices at which properties can be sold or transferred. These rates directly affect property registration costs and are a vital source of revenue for the state government. They apply to all property transactions, including residential, agricultural, and commercial land.

Projects on Dwarka Expressway Gurgaon

Details of the Hike

Deputy Commissioner Ajay Kumar announced on November 29 that the new rates will take effect from December 1, 2024, and remain in place until at least March 31, 2025. The revision, ranging between 10% and 30%, reflects current market conditions in Gurugram’s various zones.

For instance, premium locations such as Golf Course Road, known for high-end residential properties, are expected to increase by 30%. This adjustment aligns with the market rates prevailing in these areas, making property transactions more expensive for buyers.

Impact on Property Buyers

The increase in circle rates will directly raise the property acquisition cost for homebuyers. Whether purchasing a house, flat, plot, or commercial establishment, buyers will now face higher registration fees, potentially altering their investment decisions.

Santhosh Kumar, Vice Chairman of ANAROCK Group, explained, “The hike in circle rates adds to the overall cost burden for property buyers. It may lead to a temporary slowdown in sales, as any rise in costs—be it interest rates, property prices, or registration fees—impacts buyer sentiment.”

Effect on Gurugram’s Real Estate Market

Opinions among industry experts are divided on how the revised rates will influence Gurugram’s real estate market.

Potential Challenges

Mohit Jain, Managing Director of Krisumi Corporation, cautioned that the rate hike might deter some buyers from investing in properties. “Real estate is a critical driver of economic growth, supporting various ancillary industries. While the market remains robust, higher circle rates could slow down the sector’s momentum,” he noted.

Resilience of Prime Areas

Despite the hike, Gurugram’s prime areas, such as Dwarka Expressway and Southern Peripheral Road, are expected to maintain strong demand. These locations benefit from limited property supply, rising incomes, and sustained investor confidence. Pradeep Aggarwal, Chairman of Signature Global, highlighted that Gurugram’s thriving real estate sector is backed by fundamentals such as high

Projects on Southern Periphery Road (SPR) Gurgaon

demand and rapid infrastructure development. “The hike is unlikely to derail the market, which continues to perform well,” he added.

Broader Context of Circle Rate Revisions

State governments periodically revise circle rates to align with market trends. While some states, like Haryana, update these rates twice yearly, others, such as Maharashtra, opt for annual revisions. These changes are designed to reflect current property valuations and ensure fair taxation.

However, industry leaders emphasize the importance of a balanced approach to policy changes. Overly aggressive revisions could dampen buyer interest and hinder the sector’s growth. A strategic and measured approach would help sustain the real estate market’s momentum while ensuring long-term economic stability.

Conclusion

The hike in circle rates from December 1 marks a significant shift for Gurugram’s real estate market. While the increase may raise property acquisition costs and deter some buyers, the market’s solid fundamentals and robust demand will likely cushion the impact. Buyers and investors should remain informed and plan their transactions strategically to navigate these changes effectively.