Property prices in Noida expected to rise as a result of a proposed increase in circle rates in Gautam Buddh Nagar

The Gautam Buddh Nagar government has proposed raising existing circle rates and adding an extra fee on select properties, thus property prices in Noida are expected to rise.

Property prices in Noida expected to rise as a result of a proposed increase in circle rates in Gautam Buddh Nagar

Property prices in Noida are set to rise as the Gautam Buddh Nagar government recommended raising existing circle fees by up to 40% and proposing an extra 5-12.5% surcharge for homes near metro routes or expressways.

The Gautam Buddh Nagar government has suggested a 5% surcharge on properties along the metro route and near metro stations, a 7.5% surcharge on sectors on both sides of the expressway, and a 12.5% tax on sectors near both the metro station and the expressway.

On the district administration's website, a suggested draft for raising the circle rate has been posted. It is also available at several locations, including the Registry Department and the Tehsil Collectorate, where residents may file their complaints about the circular prices.

In some areas, rates have already risen

Sectors 14A, 15A, 19, 44, 47, and 93 A and B in Noida were renovated earlier, resulting in an almost 100% rise in circle rates. The district government in Greater Noida has suggested increasing the tariff from Rs 28,000 per square metre to Rs 35,000 per square metre.

Property registration would become more expensive, especially in areas near metro stations and the Noida Greno Expressway. Buyers will have to pay a 5% extra fee in addition to the circle prices as a result of the placement charge near the metro line. Those acquiring properties near the highway will be charged an additional 7.5% fee. Other than commercial and EWS or Shramik Kunj structures, this increase will be applied to all properties.

"Because of the increase in interest rates, purchasers may not invest in any property in the short term and may want to defer their buying choice for the time being," said RK Arora, head of the National Real Estate Development Council (NAREDCO).

Is this bad for business?

"Any rise in the rate must be proportional to the increase in the market rate of the property," he continued. There is already a significant difference between the market pricing and the government-set circle rate for the district. The circle rate continued to rise by 10% every year while the market remained practically unchanged, resulting in an excessive amount of variance.

"The higher circle rate is discouraging purchasers from investing in real estate property, as they anticipate a greater tax burden under Section 50(c)/56(2)x of the Income Tax Act due to the difference between the property's actual and circle rate price."

"We are just getting back on track," Manoj Gaur, CMD of Gaurs Group and vice president-north at CREDAI National, said. "However, the recent move to hike circular rates in Noida may once again stymie the sector's expansion in the region. A rise in the circle rate at this key juncture will prove harmful," he warned.

Delhi government has lowered the circle rate

The Delhi government has cut the circular rate by 20%, intending to lower the market pricing of homes in the national capital region (NCR) and revitalise the real estate sector. NAREDCO has been lobbying the Uttar Pradesh government to lower the circle rate in Gautam Buddh Nagar to be in line with the market pricing, taking into account the impact of the existing higher circle rate.

"We are unhappy to learn of the District Administration's intention to raise the circle rate rather than decrease it. We renew our demand that the circular rate is reduced rather than proposed to be increased,” RK Arora wrote to the Gautam Budh Nagar government pleading for help.

"We may also submit that real estate projects in Noida, Greater Noida, and the Yamuna expressways, which were once considered to be one of the major residential project hubs, have suffered a major setback due to delays caused by land acquisition cases, NGT work stop orders, and, most recently, the Covid-19 pandemic. Due to a severe cash situation, a big number of projects are on the verge of failure. Because of the impact of these unusual events, their income has dried up. The plan to raise the circle rate would have an impact on demand for residential and commercial units in these conditions,” according to the NAREDCO president.

"Furthermore, the increased circular rate would discourage buyers from registering their homes, resulting in a loss of income to the state government and the district administration through stamp duty." In light of the foregoing, NAREDCO, on behalf of real estate developers in the Gautam Buddh Nagar District, requests that the circular rate be reduced rather than increased further.

Source: India Today