Noida Dialogue

An initiative of Democratic Outreach for Social Transformation, DOST

‘Stagnation’ prompts big cut in Noida’s commercial circle rates

July 25, 2019

NOIDA: Citing “stagnation” in the sale of commercial property in Noida, the administration has proposed a sharp cut in circle rates, which will be notified in the first week of August. The reduction is 21% for floor-wise commercial property and 21.5% for individual commercial property.

The administration has also proposed to do away with the 25% surcharge for malls and 6% surcharge for group housing societies — 2% each for club, swimming pool and gym — across the district.

No changes have, however, been made in residential, commercial, institutional, industrial and IT/ITeS categories in Dadri, Jewar and Greater Noida. The proposal is open for objections till July 31. Circle rate is the minimum value at which sale or transfer of property takes place.

Officials hoped the reduced circle rates would be a major relief for investors and homebuyers in Noida by bringing down registry charges. The proposed change in circle rates for commercial property in Noida comes on the back of worries about the city’s economic wellbeing — officials said no large commercial property of 10,000 square feet and above was sold in the past two years (TOI could not independently confirm this).

“We are seeing that sale of commercial property in Noida has seen a stagnation, especially since 2015. In many cases, property is being sold for less than the circle rate. This shows circle rates are higher than the market value of such property. This is why we felt a need to reduce the rates for commercial property. Circle rates need to be realistic and dynamic,” said district magistrate BN Singh.

He added that this was the first time circle rates in any category were being reduced since the UP Stamp (valuation and property) Rules, 1997, came into effect. The administration has also not made any changes in the circle rates since 2015. Last year, however, some relief was given to homebuyers with reduction in surcharge for power backup, lift and community centres.

There have been several instances where market rates are less than the circle rate. For example, a private commercial property in Sector 133 was recently sold for Rs 52 crore (based on the circle rate, its valuation would have been Rs 174 crore), an official said.

“This discrepancy is disadvantageous for the buyer and seller as stamp duty is charged on the circle rate, even if the property is actually being sold at a lower price. Reducing circle rates should encourage more buyers to invest in commercial property,” said S K Tripathy, additional inspector general, stamps and registration.

Officials explained that the circle rate committee reviewed rates and current market trends across all sectors and rural areas in the district. It was observed that while smaller commercial properties like shops were being sold, there was no demand for larger properties. Circle rates for commercial property in Noida are the highest in sectors 18 and 38A.

The new proposal will bring down rates from Rs 45 lakh to Rs 35.5 lakh for shops, from Rs 35.2 lakh to Rs 27.8 lakh for offices and Rs 34.5 lakh to Rs 27.2 lakh for warehouses. Commercial property rates are lowest in areas like sectors 63A, 69, 95, 103, 106, 109, 11, 123, 138, 145, 150 and Noida Export Processing Zone.

Similarly, in case of malls, it was seen that though more malls were coming up, people preferred to rent shop space than buy. This has also been causing a dent in stamp duty earnings of the administration. “There was an additional 25% charge for escalators and central air conditioning in malls. This cost was exclusive to Noida malls and was not there in any other NCR city, including Greater Noida. We have now decided to remove it and this will bring down prices considerably,” said Singh.

The circle rate committee also found that earnings of the stamp and registrations department through stamp duty had reduced consistently since 2015, with a marginal increase in 2018-19 due to incentives given last year. However, officials said no changes have been made in the area around Jewar as increased investment is expected in the area in the coming year.

Meanwhile, real estate builders’ group Credai issued a statement that they want the administration to reduce the circle rates of group housing plots in Gautam Buddh Nagar from the present Rs 85,000 per sqm to the current commercial rate of Rs 55,000 per sqm.


Source : The Times of India