In order to keep a check on price speculations, the state government decides the circle rates in the city for different localities. These circle rates are the minimum property prices at which the sale of a property can take place. The circle rates in New Delhi are decided by the Delhi government. Usually, the New Delhi circle rates are reviewed annually, to keep them in line with the market rates.
However, in a recent announcement, on February 5, 2021, the chief minister Arvind Kejriwal-led government in Delhi has decided to cut circle rates by a flat 20% across categories, including residential, commercial and industrial buildings. The reduced rates, which will be applicable on all areas in the national capital, will remain in effect till September 30, 2021. The decision was taken in a cabinet meeting of the union territory government on February 5, 2021.
Earlier, finance minister Nirmala Sitharaman, in the Union Budget 2021-22, had allowed home buyers to buy homes at 20% lower value than the circle rates, without attracting additional tax liability. This new norm will be applicable to properties priced below Rs 2 crores, till June 30, 2021.
Home buyers and investors should know that the property registration process in Delhi and charges such as stamp duty, are based on the higher of the declared property value and the price calculated as per circle rate applicable for the sector or area of Delhi.
How to calculate property value in Delhi using circle rate?
Here is how to calculate the property value, using the circle rate:
Ascertain the property’s built-up area, plot area, age of construction, amenities, floors, etc.
Choose the type of property (residential or commercial unit, plot, house, apartment, builder floor, or shop).
Select the locality of the property
Calculate the minimum assessment figure as per the circle rates given
The formula for calculating the property value is as given below:
Property value = Built-up area (in sq metres) x circle rate for the locality (in Rs per sq metre).