The Delhi Government yesterday announced the minimum circle rates for property, which determine the lowest rate at which property can be sold for or bought at in the capital city. With a promise not to revise it for another five years, the circle rates would curtail the quantum of black money in real estate Delhi market, and help push up the state government’s collections through registration by at least Rs.700 crore.

Since the circle rates are more realistic than the figures hitherto quoted by buyers and sellers, property prices in Delhi are expected to step up slightly.

Undervaluing properties is a common practice to evade stamp duty, which is 8% for men and 5% for women purchasers in Delhi . The capital has been broadly segmented into 8 areas, excluding the unauthorized settlements and rural pockets, and a minimum price fixed for assessment purposes.

Evaluation of property will be based on certain other factors as well, such as the year in which the property was constructed, and the category the property falls into, such as those built by private builders, Janta flats, DDA flats, Low Income Group or Middle Income Group. Accordingly, the circle rates for residential properties in Delhi are:

The computation of the value of the residential property follows the pattern set by the Municipal Corporation of Delhi (MCD) in its calculation of house tax in different colonies.

Commercial properties in Delhi will be valued at thrice the value of the residential property in each category. Construction costs across categories have been maintained at Rs.7,600 per sq. m to evaluate the property in Delhi.

For properties built every 5th year before the year 2000, the rate would decrease by 0.1. Estimation of built up flats, however, would be unaffected by the age of construction, though their category would decide the value.

Rates applicable to DDA developed colonies and cooperative housing societies are:

Plinth area in sq.m	Rate in Rs.
30	8,600
30 - 50	9,300
50-100	11,300
Above 100	13,000

Apartments in 4 or more storied structures have been accorded a uniform plinth area rate of Rs.15, 000 per sq. m. Flats constructed by private builders invite a multiplicative factor of 1.25.

With the new circle rates in force, property transactions in Delhi will have a far smaller component of black money, and will simultaneously enable the buyer to take a bigger loan to finance his home.