Delhi is one of the most expensive cities for rental properties and this trend is slated to be magnified as the government has proposed to link lease and rent agreements to circle rates of various Delhi properties. This can lead to an increase in the rental rates of properties, particularly in central and south Delhi neighbourhoods. Circle rate is the minimum value at which a property transfer can take place.
Reportedly, the stamp duty on lease deeds and rental agreements, commercial or residential has to be given by tenants during registration. It shall be calculated based on the existing circle rates of the area. A five to seven percent circle rate is expected to be imposed on rental properties. This move shall stop stamp duty evasion in the city as landlords often do not write the real rental amount in the lease agreement drawn up. Several home owners are also unaware of the actual rent that they can get from their property for rent in Delhi for fear of paying higher taxes. Therefore, a hike in rental rates of properties shall allow landlords to protect their earning after the payment of added taxes.
The hike shall definitely be difficult on rent seekers, particularly in south Delhi where the circle rates are higher than most other areas of the city. Neighbourhoods such as Greater Kailash, Connaught Place and Khan Market, counted among the most expensive in the city for rent, shall see a further increase in rental values. The department of revenue has forwarded this proposal to the department of finance for consideration. Once the department of finance gives a nod, it shall be put forth in the cabinet.
The circle rate was first introduced in the National Capital back in 2007 as a market price indicator. Apart from standardizing the market rates, the periodic hike in circle rates also acts as a disincentive for using cash for property purchase or undisclosed amounts. The state government revises it periodically and it differs among areas. The circle rates for Delhi are divided into eight categories, from A to H. The properties classified under the A category are the city's poshest ones and hence have higher circle rates.
Quite recently, the Delhi Government was planning to increase the circle rates for DDA Flats and Group Housing Society Flats by almost 100 percent. Currently, these flats in Delhi have a uniform circle rate applicable of Rs 58000 per sq m. If the plan is approved, then the circle rates for apartments may go up by 100 percent. As rents may be linked to them, the hike in rates of property for rent in Delhi may also be very high.
More than those renting in expensive areas, rent seekers in affordable areas like Laxmi Nagar and Rohini would be more affected by the hike. The Delhi Government has also proposed an increase in circle rates of agricultural lands surrounding the city. The hike shall be of 125 percent almost.
Reportedly, the stamp duty on lease deeds and rental agreements, commercial or residential has to be given by tenants during registration. It shall be calculated based on the existing circle rates of the area. A five to seven percent circle rate is expected to be imposed on rental properties. This move shall stop stamp duty evasion in the city as landlords often do not write the real rental amount in the lease agreement drawn up. Several home owners are also unaware of the actual rent that they can get from their property for rent in Delhi for fear of paying higher taxes. Therefore, a hike in rental rates of properties shall allow landlords to protect their earning after the payment of added taxes.
The hike shall definitely be difficult on rent seekers, particularly in south Delhi where the circle rates are higher than most other areas of the city. Neighbourhoods such as Greater Kailash, Connaught Place and Khan Market, counted among the most expensive in the city for rent, shall see a further increase in rental values. The department of revenue has forwarded this proposal to the department of finance for consideration. Once the department of finance gives a nod, it shall be put forth in the cabinet.
The circle rate was first introduced in the National Capital back in 2007 as a market price indicator. Apart from standardizing the market rates, the periodic hike in circle rates also acts as a disincentive for using cash for property purchase or undisclosed amounts. The state government revises it periodically and it differs among areas. The circle rates for Delhi are divided into eight categories, from A to H. The properties classified under the A category are the city's poshest ones and hence have higher circle rates.
Quite recently, the Delhi Government was planning to increase the circle rates for DDA Flats and Group Housing Society Flats by almost 100 percent. Currently, these flats in Delhi have a uniform circle rate applicable of Rs 58000 per sq m. If the plan is approved, then the circle rates for apartments may go up by 100 percent. As rents may be linked to them, the hike in rates of property for rent in Delhi may also be very high.
More than those renting in expensive areas, rent seekers in affordable areas like Laxmi Nagar and Rohini would be more affected by the hike. The Delhi Government has also proposed an increase in circle rates of agricultural lands surrounding the city. The hike shall be of 125 percent almost.
Courtesy By :- http://www.artipot.com/articles/1915323/rental-rates-in-delhi-may-be-linked-to-circle-rates.htm
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