New circle rates for Noida, Greater Noida, and Ghaziabad are proposed in the range of 7-25%, are to come into force from August 1, 2013.
The proposed raise in circle rates is another setback for buyers and real estate developers of Noida, Greater Noida, and Ghaziabad.
The new circle rate of Greater Noida West (Noida Extension), one of the most affordable regions for middle-income buyers of the NCR, will be Rs 28,000 per sq metre, up from the existing Rs 22,500 per sq metre.
The new circle rate will be effective with some changes like creation of ‘V code’ for valuation of properties in the new areas, sectors, and villages, with extra charges (5% each) on facilities like gymnasiums, security, clubhouses, lifts, swimming pools, etc.
There has been little amendment in the existing UP Stamp Valuation Rules, 1957, for the financial year 2013-2014 on the circle rates, especially in Ghaziabad and Gautam Budh Nagar (Noida-Greater Noida) districts.
S K Singh, assistant commissioner stamp of Gautam Budh Nagar, says, “The revised rates are likely to be implemented from August 1 and the rates are going to be in the range of 7-15% for residential property, 12-25% for industrial property, and 18-32% for commercial property.”
The proposed increase in circle rates will include all categories of residential, institutional, industrial, and commercial properties. The main reason for levy of an extra 5% charge on every facility is to achieve a revenue mopup target of Rs 1,535 crore in Gautam Budh Nagar.
In Noida-Greater Noida regions, the effective revision of circle rates is by nearly 40% since 2005, except for a lull during the period of recession in 2008-2009.
With fresh circle rates, the properties in Noida-Greater Noida and Ghaziabad regions will get costlier. The development authorities have already raised allotment rates recently. The allotment rates for group housing, and residential and institutional properties have been increased by up to 15%, while commercial and industrial land rates have been raised by 30% and 11.25%, respectively, in the Noida region.
The Greater Noida authority raised allotment rates for land across all categories uniformly, by 8.53%, excepting industrial land.
The Yamuna Expressway authority has raised its allotment rates by up to 15%. Allotment rates on industrial land in Greater Noida have been spared this time around, keeping in view the development of the region.
The increased circle rates means that buying a house or any other property in Noida, Greater Noida, Yamuna Expressway, or Ghaziabad will cost more. Ultimately, the burden will be borne by buyers. This new revision will hit buyers, as they will have to shell out more money in the form of stamp duty charges. However, increasing allotment and circle rates will be a good way to develop the region as the local authorities will have more funds to build the local infrastructure.
The new circle rates are going to affect the affordable segment in Noida. Small developers are dedicated to complete their project on time and need friendly environment to begin new projects, but these recurring revisions do not further the interest of buyers or developers.
S N Rai, assistant commissioner stamp of Gautam Budh Nagar district, says: “The proposed increase in circle rates will be close to 25%. The circle rates for residential properties are likely to be revised by 10-15%, while commercial rates will be equivalent to the authority’s rate. To promote the industrial set-ups in Greater Noida, we have decided not to increase circle rates for industrial properties.”
The district administration, as a policy, will make moderate revision to the rates in rural areas where the population is low, compared to regions where there are more land transactions, and prices are escalating.
After the new circle rates come into operation, prices of residential, commercial, industrial, group housing, builder’s area, etc, in Greater Noida West (Noida Extension), Yamuna Expressway, and UPSIDC would go up on average by 15%.
Also, the circle rates in Greater Noida’s Alpha, Gamma, and Beta residential sector are expected to be revised to Rs 24,000 per sq metre from Rs 22,500 per sq metre.
Development agency officials say that though the circle rates are proposed to be increased in rural and urban areas, the residential sector will see the maximum increase because of the huge transactions in the residential sector in places like Noida Extension, Noida-Greater Noida Expressway, Crossings Republik, Raj Nagar Extension, Indirapuram’s Shipra Sun City, etc.
The proposed new circle rates will be higher in developed sectors than in developing sectors. For instance, the existing circle rates in developed sectors of Noida like Sectors 11, 12, 22, 42, 43, 45, 70, 71, 72, 73, 75, 76, 78, 104, 107, 110, 119, 120, 121, 128, 129, 130, 131, 132, and 133 is Rs 35,000 per sq metre. The circle rates in Sectors 14A, 15A, and 44 are in the range of Rs 68,000-70,000 per sq metre. In rural areas like Bahlolpur, Chotpur, Haibatpur, Naya Bans, Chhalera Bangur and Hajipur the circle rates are in the range of Rs 7,000-15,000 per sq metre. In all these sectors and villages, the circle rates will be increased by 7% to 15%.
New circle rates in Ghaziabad
The Ghaziabad district administration has also plans to raise the circle rates, between 20% and 25%. With the proposed circle rates, Kaushambi will become one of the costlier residential sectors in trans-Hindon area of Ghaziabad.
The Ghaziabad district administration has brought the circle rates of residential properties on a par with commercial properties. This means that the circle rates of residential and commercial properties will be the same in areas like Chaudhary Mode, Nehru Nagar, RDC Complex, Ashok Nagar, Kavi Nagar, and Raj Nagar’s areas like Sectors 1, 2, 5, 9, 10, 11, 12, and 15.
G P Singh, assistant commissioner, stamp, of Ghaziabad district, says: “To revise the circle rate we have adopted a new arrangement. Under the new arrangement, the new circle rates will be recovered sectorwise; earlier, they were recovered separately according to the area — Hindon and trans-Hindon zone. The government is facing loss in revenue generated through the existing stamp duty and this has prompted the new revision in circle rates. There is a huge gap between market and government property prices. To fill the gap in revenue generation from properties, we have decided to increase the circle rates.
Circle rates are going to increase in Ghaziabad, too, due to the rise in demand for residential, commercial, and industrial land. The raise could be in the range of 10-20%, depending on the land use. The developers will acquire land on the revised circle rates on NH-24, NH-58 and other areas. Somehow, this is good for the development of the area and it will bring transparency into the flow of money, but at the other end it is going to affect the cost of projects even as developers are already struggling to deal with regulations, approvals, and runaway cost of building material.
Increase in circle rates is a universal phenomenon across India; many development authorities and municipal corporations are revising these rates annually and there is nothing new. The authorities, however, are not ready to reduce the stamp duty, which has been done by many progressive states.
The new circle rates being implemented by the authorities will directly affect the pricing of real estate. This will only add to the rising cost of real estate which is already reeling under the impact of the prohibitive cost of raw materials.
Developers have thus far tried to absorb price spikes, in our endeavour to deliver the properties to end users at a comfortable price range. Now, with the increase of circle rates, almost every quarter, the price of residential property is bound to shoot up.
Alok Kumar Upadhayay