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12 October, 2018
Good news for the investors in Noida as well as in Greater Noida as soon the cost of owning the property is going to be reduced because the district magistrate has made some proposals for the rebate in circle rates. As a result of the rebate, registration cost of residential, institutional and commercial properties will be reduced up to 50% in the areas of Noida and Greater Noida. Circle rate is that minimum rate and below this minimum rate, no sale and transfer of property can take place.
With this decision, real estate in India specifically in these areas will have a boost for investment and investors will get interested in making investment due to reduced registration rates. B. N. Singh, district magistrate has taken this decision to hype the investment in Noida and Greater Noida. These areas are witnessing a slump in the investment and it is expected that rebates in circle rate will make changes in the investment. There was a big hit in the revenue of the government in the last financial year. In the last financial year, only 67% of the expected revenue was collected by the government. Therefore, for the first time, the district administration has given a proposal for reducing the circle rates.
Feedback is invited from the stakeholders by the administration and report will be sent to the government. After that from 1st August, revised rates will be implemented.
However, according to the proposal for residential properties, lift facilities and power backup are not included in the circle rate calculation. There is also a 50% reduction in cess for facilities such as swimming pool, community centre and gym. Decreased property rates in India will also attract foreign investors.
Impact on the investors
Presently, 3% surcharge is charged for 5 facilities gym, swimming pool, club, lift and power backup and this adds the costing up to 15%. For example, if anyone is buying an apartment for Rs 50 lakh that have all the facilities. For all the registration purpose, the cost of the apartment will be Rs 57.50 lakh which is 115% of Rs 50 lakh. So, the investor is going to pay Rs 2.88 Lakh as the stamp duty which is 55 of Rs 57.50.
Under the proposed rate, the investor will pay Rs 2.50 lakh as the registration of the same apartment and for the facilities mentioned above, he has to pay extra 6% in comparison to earlier 15%.
Likewise, the commercial properties will also enjoy the rebate in circle rate like for the ground floor, the proposed rebate in circle rate is 15%, it is 25% for the lower ground along with the upper ground, same rebate circle rate for mezzanine floors and it is 35% on the II floor.
As the cost of owning property is going to be reduced, therefore, it will be a major reason for increased investment in the area. It is a good opportunity provided by the government to boost the market of Property in India.