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NEW DELHI: The Delhi government is preparing for a significant overhaul of circle rates, the first in over ten years, aimed at aligning property values with actual market rates.
Key proposals under consideration include creating a new A+ category for ultra-premium areas of Lutyens’ Delhi, revising farmhouse valuations comprehensively, implementing location-based pricing, and establishing a review system to align rates with market shifts.
A senior official indicated that stakeholders suggested the A+ category because various localities in Lutyens’ Delhi, where property prices significantly exceed the highest notified rates, currently fall under Category A, which does not accurately reflect their market value. “The disparity between the notified rates and actual transaction values in these areas is among the widest in the city,” the official stated.
Another critical focus of the upcoming revision will be farmhouses, particularly in the urbanized regions of south Delhi. Many of these properties, which typically host large-scale events and function as luxury residences, are still valued at agricultural rates even though they are part of urban Delhi. “Their circle rates hardly differ from those in outer Delhi, resulting in a substantial mismatch,” a senior official commented.
New proposals may advocate for location-based farmhouse rates that reflect current real estate values, replacing the outdated agricultural valuation framework, he added.
Experts have long highlighted that this valuation discrepancy leads to considerable revenue loss for the government. In Delhi, the issue is exacerbated because circle rates for residential and commercial properties were last updated in 2014, while agricultural land rates haven’t changed since 2008.
Circle rates in many upscale colonies are much lower than market prices, contributing to large cash components in transactions, artificially low paper valuations, and reduced stamp duty revenues. Conversely, some areas have circle rates above market values, which are expected to be adjusted downwards.
At present, Delhi is categorized into eight groups (A–H), with rates ranging from Rs 7.74 lakh per sqm in Category A to Rs 23,280 per sqm in Category H. However, officials noted that development levels within the same category can vary greatly. For instance, Golf Links and Kalindi Colony both fall under Category A, despite having significant differences in property prices, amenities, and infrastructure.
This exercise is being conducted by a committee led by the divisional commissioner, formed in June by Chief Minister Rekha Gupta. Officials mentioned that the recommendations may include both increases and decreases in rates and will consider public feedback before being presented to the Chief Minister, who oversees the revenue portfolio.
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