Delhi's property owners in a fix over circle rate, market value mismatch

New Delhi: Several property owners in the national capital are finding it difficult to sell their properties as those fall in colonies marked with circle rates — the government-mandated minimum price — much higher than actual market values.

On the other hand, there are other colonies where the circle rates are far below the prevailing market rates, leaving even the authorities worried about potential loss of tax revenues.

Experts believe the solution for both the cases lies in either rationalising the circle rates or reclassification of colonies as per the prevailing trends and facilities.

Circle rates are the benchmark price of the property, below which one cannot register their property deals.

As per the data compiled by India Sotheby's International Realty, one of the leading property consultants of luxury and ultra-luxury homes, the market rates in many colonies that fall under Category A are much lower than the circle rate of Rs 7.74 lakh per square metre.

For example, the market rates in Panchsheel Park is Rs 3.3 lakh per square metre, in Maharani Bagh Rs 4.6 lakh and in New Friends Colony Rs 3.5 lakh.

In contrast, there are many colonies in Category B where market rates are much higher than the circle rate of Rs 2.46 lakh per square metre. For instance, market rate in Defence Colony is Rs 6.7 lakh and in Greater Kailash I Rs 5.2 lakh per square metre.

Due to these anomalies, many buyers and sellers are facing difficulties in concluding transactions.

"I, along with my brothers, inherited a 1,008-square metre plot at Panchsheel Park in South Delhi. Over the last 10 years, we have, without success, tried to sell the property but to no avail. In the case of my Ring Road facing property, the price as per circle rates is Rs 78 core, while the market price of my freehold plot is Rs 45 crore," said Jasraj Singh.

The circle rates in 'A' category colonies had increased 9 times from Rs 86,000 per square metre in 2010 to Rs 7.74 lakh per square metre by 2020, he pointed out.