The real estate sector in Noida is poised for significant changes as the Stamps and Registration Department has filed a proposal with the district magistrate to revise the existing circle rates, which have remained stagnant for the last five years. The proposed revision includes a substantial 30% hike in residential sectors, a 10% rise in commercial and IT sectors, and a 15% increase for industrial zones.
This move is likely to affect the overall property prices in the region, influencing the amount of stamp duty paid by buyers. With this impending change, it’s essential to understand the impact it will have on different categories of real estate and how it compares with similar developments in neighboring areas like Greater Noida and Ghaziabad.
What Are Circle Rates?
Circle rates refer to the minimum rate at which a property can be registered when being bought or sold. These rates are set by the government and are used to calculate the stamp duty and registration fees. Although they do not reflect the market value of a property, they play a crucial role in determining the legal valuation for taxation purposes.
Current Circle Rates in Noida
The circle rates in Noida have been unchanged since 2019. Different sectors have varying rates based on their residential, commercial, industrial, or IT zoning. Here are some of the current and proposed circle rates for specific sectors:
| Sector/Area | Current Rate (₹/sqm) | Proposed Rate (₹/sqm) |
|---|---|---|
| Noida Sectors 14 & 14A | ₹1,13,850 | ₹1,42,312 |
| Sector 19 | ₹79,200 | ₹99,000 |
| Sectors 71-78 | ₹57,750 | ₹72,187 |
| Greater Noida Sectors Alpha 1 & 2, Gamma 1 & 2 | ₹28,000 | ₹35,000 |
| Sectors Eta 1 & 2, Omicron 1 & 2 | ₹26,500 | ₹33,125 |
| Phase 1 (Sectors 1-11) | ₹37,000 | ₹40,700 |
| Ecotech-1, 3 (Gr Noida) | ₹7,000 | ₹7,700 |
The most significant increases are projected in sectors like 14 and 14A, where the current rate of ₹1,13,850 per square meter will jump to ₹1,42,312, representing a 25% rise. Similarly, Sector 19 will see an increase from ₹79,200 to ₹99,000 per square meter. Such increases could lead to higher registration costs for properties in these localities.
Impact on Residential Properties
For homebuyers and investors, the proposed 30% increase in circle rates for residential properties means that purchasing or registering a property will become more expensive. The stamp duty, which is calculated based on these rates, will rise proportionately, making real estate investments in Noida more costly.
For example, in Noida’s Sectors 14 and 14A, the current circle rate for residential plots is ₹1,13,850 per square meter. With the proposed hike, this will go up to ₹1,42,312 per square meter. Buyers in these sectors will face a steeper financial commitment, as the registration fees and stamp duty will be calculated based on the new, higher rates.
Commercial and IT Sectors to See 10% Increase
The commercial and IT sectors are also expected to face an increase in circle rates, although at a more modest 10%. This rise is likely to affect property transactions in areas zoned for commercial and IT development, particularly as Noida has become a hub for technology companies and startups.
Given the relatively lower increase compared to residential areas, the impact on commercial properties may not be as severe. However, businesses planning to set up in Noida should take note of the potential rise in operational costs associated with purchasing or leasing commercial properties.
Industrial Sector: A 15% Hike
The industrial sectors in Noida, including key areas in Greater Noida and Yamuna Expressway, are set to experience a 15% increase in circle rates. For manufacturing and logistics companies, this translates to higher costs when purchasing land for industrial use.
Notably, Greater Noida’s Alpha 1, Alpha 2, Gamma 1, and Gamma 2 areas will see a rise from ₹28,000 to ₹35,000 per square meter, impacting land transactions for industrial and warehousing purposes.
Comparison with Neighboring Regions
Earlier this year, Ghaziabad implemented a similar revision in its circle rates after a two-year freeze, with increases ranging from 15% to 20% for residential and commercial properties. This adjustment brought Ghaziabad’s rates in line with the rising property market. The proposed hike in Noida can be seen as a response to these regional trends, ensuring that Noida remains competitive in the property market while addressing the revenue needs of the local administration.
Factors Behind the Rate Hike
According to Shashi Bhanu Mishra, Assistant Inspector-General of the Stamps and Registration Department, the last revision of circle rates took place in August 2019. Given the significant growth in property values over the last few years, particularly in light of Noida’s expanding infrastructure and proximity to key projects like the upcoming Noida International Airport, the revision of rates is long overdue.
Circle rates are typically reviewed every six months to a year, but the pandemic resulted in a temporary freeze on these adjustments between 2020 and 2023. With the real estate market now recovering and property prices rising, the administration has deemed it necessary to revise these rates to reflect the current market conditions.
How Will This Affect Homebuyers?
For potential homebuyers in Noida, the increase in circle rates could lead to higher overall costs when purchasing property. This could potentially slow down property transactions in the short term, as buyers adjust to the new rates. However, in the long term, the revision could bring more transparency to the real estate market by aligning government-set rates more closely with market values.
FAQs: Understanding Circle Rate Hikes in Noida
Q1: What are circle rates?
A: Circle rates are the minimum values at which properties are registered in a particular area. They are used to calculate stamp duty and registration fees during property transactions.
Q2: Why is Noida increasing circle rates?
A: The Stamps and Registration Department in Noida has proposed an increase to reflect the current property market values. Circle rates have remained unchanged since 2019, and the proposed hike is aimed at ensuring the rates align with the growth in property prices.
Q3: How will the new circle rates affect property buyers?
A: The new circle rates will lead to higher registration costs, as stamp duty and other fees are calculated based on these rates. For residential properties, this means that buyers may need to pay more upfront when purchasing a property.
Q4: When will the new rates be implemented?
A: The proposal is currently under review and will be released for public feedback. If approved, the new rates will be implemented within a few months.
Q5: Will commercial and industrial properties be affected as well?
A: Yes, commercial and industrial properties will also see an increase in circle rates, though the rise will be more modest (10% for commercial and IT sectors, and 15% for industrial zones).