Black Money


The revised have been more focused on the residential sector and this will lead to the reduction of black money component in property transactions in the resale market

Gurgaon district administration recently revised the circle rates of property for the second time in the current financial year making the purchase of a house in the city a little more expensive. However, realty experts say the revised government rate will hardly impact the prevailing market prices of properties in the city and its adjoining areas, and that buyers will have to pay more on account of transaction charges owing to enhanced stamp duty.

The district administration claimed that they were prompted to revise the circle rates for the second time inside of seven months as the realty sector had bounced back from the crippling recession. "This has been done after studying and observing the recent trend of property registration in Gurgaon. This will also reduce the role of black money in this business, " R K Kataria, Gurgaon's deputy commissioner, said.

Kataria claimed that the increase was realistic since it is based on the prevailing market rates, the registration of and the rates declared by various developers. He added that many developers had already launched new schemes and the prices were up in comparison to what were prevailing in March.

"Now, the situation has improved. There is hectic transaction in property for future development of areas like in the 2km zone around the KMP Expressway and residential zones around the southern and northern peripheral roads, " Kataria said.

Sources said that considering the market trend of the residential property price going up, the revised circle rates have been more focused on the residential sector. In the case of commercial properties, the change in circle rates is minimal.

"This could have happened since there is a major fall in the demand of commercial space in Gurgaon. The city has huge commercial space, which is already available. Predicting that demand of commercial space would increase, most of the developers had focused more on commercial development in the past, " said a market insider.

As per the revised rates for residential properties, the maximum increase has been in the case of private colonies like DLF, Sushant Lok, South City and Palam Vihar. In DLF-III and South City-I & II the increase of government approved minimum rate is more than 100% and in DLF-I it's exactly 100%. The rates have been revised within a period of only seven months, which government claims has been done to bring the official rates somewhat closer to the prevailing market rate.

However, market sources said this would still be inadequate in curbing the use of black money in property sale and purchase. "Even after the revised circle rates, one yard of residential property in DLF-I would come close to Rs 30, 000 whereas prevailing market rate is Rs one particular lakh. On an average, the official property rate is almost 50% of the market price, " said a property dealer.

Other are of the opinion that the circle rate has little impact on the overall final market price. "This will only help government to generate more revenue, " says a major realty consultant operating across the NCR. In fact, the district administration hopes the revised rate would help it generate additional revenue of nearly Rs 125 crore a year. Insiders in the property business say that there have been reports of builders trying hard to convert properties approved for commercial development to residential development to get more buyers.

Meanwhile, land prices in areas that are yet to be developed as per Gurgaon Master Plan 2021 have increased by nearly 30% in the last 3-4 months. Sources said that there is hectic buying since there are indications of more Japanese investments coming to this region, which could push the demand for residential properties.

The circle rates of agricultural and all other properties falling within the already controlled areas: to be developed as per plan: have also been revised. The hike is significant in case of villages like Hyatpur, Garauli Khurd, Garauli Kalan and Daulatabad. But revenue department officials maintain that the official rate is much les than that of the real market price. "Agricultural land which can officially be sold at Rs one particular. 5 crore per acre is being sold at over Rs several crore. Prices will further shoot up as more development happens in the region, " the official points out.