NOIDA: The stamps and registry department has decided to reduce circle rates, especially in the group housing and commercial categories, as it has failed to achieve the annual target revenue. Senior officials of the stamps and registry department said that they were not able to generate the revenue due to a steep hike in circle rates undertaken earlier.

The target revenue for Gautam Budh Nagar for financial year 2013-14 is Rs 1,536.60 crore. However, till January, the department has only managed to earn Rs 1,083 crore. Officials said that in the past few months the number of properties being registered have gone down due to the steep hike in circle rates. In 2012-13, the department’s target was Rs 1,835.30 crore, but it was only able to earn Rs 1,015 crore.

In the group housing category, the registry department charges 5% extra for each facility being provided, like swimming pool, club, etc. However, the aggregate of all facilities has a cap of 25%. “If the circle rate in group housing is Rs 55,000 per sq metre, then buyers end up paying Rs 67,500 per sq metre (25% extra) for enjoying five facilities. We have found this to be unjustified and proposed to curtail charges on extra facilities. We have also proposed slashing rates in the commercial category by at least 10%,” said a senior department official.

“The proposal will be sent to the district magistrate who in turn will send it to the Allahabad head office,” the official added.

Officials said that hike in circle rates of the residential category will be dependent on the lease rent, the rates of which are varied. “In some lease deeds, the authorities charge 1% as lease rent, while in others 2.5% is levied,” an official said.

Real estate experts have welcomed the move and suggest that this is the best time for investment. At the same time they have criticized the earlier policy of the government in hiking circle rates. While the current circle rates for residential category in Noida is Rs 55,000 per square metre, the commercial rates vary between Rs 75,000 to Rs 1.5 lakh per square metre. Surprisingly, in neighbouring Ghaziabad, circle rates for residential category is Rs 50,000 and commercial is Rs 1 lakh. If the circle rates in Noida are lowered, property would become officially cheaper even though market rates would remain higher in Ghaziabad.

Last year, circle rates were increased by the department despite opposition by city residents and homebuyers. At the same time the authorities had hiked property rates by up to 30%. Greater Noida Industrial Development Authority has last week in its board meeting announced a 10.21% hike in the allotment price across all categories of land in the city.

Developers said circle rates in Noida are unrealistic. “We have raised this issue on various platforms through CREDAI. In some cases market rates are below prevailing circle rates in Noida, but the buyer has to pay a higher registration tax,” said Manoj Gaur, president CREDAI (west UP) and MD of Gaursons. “This decision should have been taken earlier as it will reduce the burden on buyers,” said Amit Gupta, MD, Orris Infrastructure and Assocham member.

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