With the new financial year starting from April 1, 2024 residential and commercial circle rates in Jaipur will increase by 10% which will make registration and stamp duty costs higher, though the rebates given in stamp duty will remain as per the previous financial year which could help offset some of the additional costs associated with the 10% circle rate increase.
This year 10% hike in circle rates by the Rajasthan government from 5% last year is aimed to boost its stamp duty revenue. While the exact amount will depend on the property value and location, the buyers will have to face the escalation in the land prices of the city.
WHAT IS CIRCLE RATE
Circle Rate of a property also known as ready reckoner, unit rate, collector rate, guidance value, etc., is the valuation fixed by the state government on that property. The government bases its judgement on the property's location, amenities, use and age.
The circle rate in Jaipur is also called the DLC rate, short form for the District Level Committee rate. This is the minimum rate the government assigns to a property in Jaipur. It helps to evaluate the stamp duty of the property during any sale. The registration and stamp duty will be calculated based on the higher val- ue of the two–circle rate or market value. The stamp duty for men is 6% in Jaipur and 5% for women.
A circle rate serves as a benchmark for calculating stamp duty and registration charges, which are taxes levied on property transactions. Stamp duty and registration charges are calculated based on the circle rate. When the circle rate is lower, these associated charges are also lower and this can lead to substantial savings, especially for high-value properties.
THE IMPACT ON PROPERTY MARKET
Circle rates are determined by a District Level Committee (DLC) considering factors like location, market value, and available amenities. These rates are categorized as residential, commercial, institutional, and industrial.While, the rise in circle rates reflects Jaipur's growing real estate market, it surely will impact the buying costs and customer sentiments. Jaipur remains an attractive option for those seeking property in a well-connected and well-equipped city with relatively affordable prices compared to neighboring metros of Delhi & Mumbai. The areas that have witnessed the highest DLC rate increase in Jaipur are CScheme and MI Road.
As per Rajasthan real estate body, CREDAI Rajasthan, the prices will rise 35-40% in the coming couple of years with expected appreciation of up to 40% in property prices in the next two years because of rise in raw materials and land prices. They also plan to write to the state government to review the decision. The city builders for now, would not pass on the extra cost to the buyer fully and share half of the additional cost.
However, the recent hike of 10% in circle rates for land and discontinuation of 2% rebate on stamp duty for purchase of flats costing less than Rs 50 lakh coupled with rising inflation is surely to have an impact on home buyers purchasing power.
The highest DLC rate increase is in - CScheme and MI Road. The per square feet costs now range between Rs 90,000 and Rs 1.25 lakh. The cheapest land is in the Amer- Jal Mahal area, with prices ranging between Rs 12,000 and Rs 42,000.
In affordable areas like Jagatpura, Model Town, and Indira Gandhi Nagar, the rates vary from Rs 16,800 to Rs 19,650. For Sodala, Nandpuri, Hawa Sadak, Shyam Nagar, and Suez Farm areas, the DLC rate varies from Rs 16,800 to Rs 70,000.
Mid-range areas like Vaishali Nagar, Hanuman Nagar, Vidyut Nagar, and the Chitrakoot presently have DLC rate varying from Rs 48,000 to Rs 65,000.