Premium Areas in Noida May Witness A Hike In Circle Rates.

Noida is emerging to be a top realty market in NCR. The fast paced infrastructural development of the place has helped the real estate industry pick up growth in the last few years. It is preferred destination for real estate projects as the city has a wide range of housing options available as compared to any other city/ town in NCR. Noida is constantly expanding and growing and this expansion is continuously creating more options for real estate growth in the city. The various government announcements and infrastructural uplifts in Noida have had a positive effect on the growth of the city and have made the city an attractive real estate investment option both for buyers as well as end users.

Some of the forthcoming developments in the city are, the proposed extension of Dwarka-Noida City Center to Pari Chowk which will provide good connectivity to Delhi and prime areas of NCR, the upcoming 29kms long Noida- Greater Noida Metro Link and lastly setting up of own power plant by the Greater Noida Industrial Development Authority (GNIDA) for uninterrupted power supply. Though the area is much in demand due to its huge variety of affordable housing options but there are several premium projects by top class builders coming up soon in Noida and the nearby areas.

Thus affordability, ample availability, good road network, excellent infrastructure and metro connectivity are some of the key factors that are leading to a boom in the Noida real estate market. The upcoming projects like Taj Economic zone along Yamuna Expressway and the Export Promotion Zones are also expected to a give a push to the economic development of the city which shall further lead to real estate development of the city. Thus Noida is the brightest shining star in the real estate industry of NCR.

Recently the Gautam Budh Nagar administration proposed a rise in the circle rates in the range of 15%-25% for areas like Noida and Yamuna Expressway, leaving behind Greater Noida.

By Circle rate we mean the minimum value at which the transfer of plot, built up house, apartment or land or second sale takes place and 2013 onwards, these rates are increased annually with effect from 1st August. The main objective behind this annual revision is to maintain the rates of property as per the existing market rates and facilities available.

It was proposed that the circle rates in the above mentioned two areas will be increased up to 25% in case of institutional property and for residential segment the rise shall be by up to 15%. This hike was proposed in proportion to the rise in land allotment rates which was 15% for Noida and 10% for Yamuna residential category. There was no increase of rates for group housing. As per the District magistrate, this move was not intended to put a financial burden on the prospective property buyers.

However the builders and home buyers did not welcome this proposal as it would increase their financial obligations and dampen their sentiments further. Because if there was in increase in the circle rates, the buyers will have to spend more for getting the registries done, which will discourage them from making an investment. This circle rate hike is expected to give a major setback to buyers who are planning to make investments in the city especially the first time buyers who have budgets means and might end up delaying or putting off their investment decision due to the lack of funds. The stamp duty to be paid while getting the property registered is in proportion to the circle rates. It was felt that these rates are high in a few areas and need to be realigned so as to be in sync with the market rates.

Hence indicating a u turn from its previous plan of increasing the circle rates across Noida, the district authorities announced that the hike will be restricted only to the premium areas of the city and will not affect the middle-class housing segment.

As explained by the District magistrate, the overall impact of the increased circle rates will not account for more than 5% of the total number of fresh registrations in the best sectors of Noida. The rates need to be increased in the premium sectors of the region in order to regularize them and the lower middle class and middle class is left out because the authorities don’t want to put  any additional financial burden on them.

Since increased circle rates mean higher capital tax gains for the seller and more stamp duty and registration charge for the buyer, so the district authorities were under a lot of pressure from buyers and developers to take back this proposal of making a hike in circle rates.

As per the Assistant inspector general (stamp and registration), the new rates shall be implemented from 1st august onwards and it is just the 5% of all the allotted areas in Noida that shall be affected by this raise.

Since the group housing areas like Noida Extension were not a party to this circle rate hike, there is no resentment from them for the same.