Raising The Collector Rates

                                                                                         

Indian Real Estate: A Hike In Chandigarh, UT Land Rates

Chandigarh Administration has revised and raised existing collector rates for prime commercial, residential and agricultural areas, resulting in an average increase of 30% on land rates and 10% on floor construction prices for the purpose of stamp duty, which had been reduced from 6% to 5%. With market rates for land on an uncontrollable upward spiral, speculation has been rife over the percentage of increase in stamp duty. “There has been a considerable increase in the prices of properties. Therefore, the collector rates were required to be reviewed,” confirms R.K. Rao, DC, Chandigarh. This, while only a couple of weeks back, a news report stated stamp duty was to be abolished in order to allow property transfers during the lifetime of the owner, so as to avoid family squabbles over property after the demise of the owner.

However, it was the volatility of land prices that forced Chandigarh administration to increase collector rates twice in 2005, a 50% increase in July 2005 followed by another 60% rise in November, of the same year. Even as market rates continued to rise, collector rates remained the same without being revised.

Applicable from Monday, the new collector rates for commercial areas, now stand at Rs. 24, 960, up from Rs. 19,200 per sq. yd., while they are Rs. 28,080, up from Rs. 21,600 per sq. yd. for industrial area property in Chandigarh’s Iron and Timber markets. As for Shivalik Enclave’s commercial booths, a buyer will now pay Rs. 1,092-lakh per sq. yd., while Mani Majra will command Rs. 46,800, up from Rs. 36,000 per sq. yd. rate.

Rates for small booths in the northern sectors of the city ranged between Rs. 60,000 and Rs. 1-lakh, however, they have now been revised and range between Rs. 78,000 and Rs. 1.40-lakh. Monday onwards, a shop-cum-office area in Sector-17 will demand a minimum of Rs. 2.18-lakh i.e. Rs. 50,000 more than the previous price of Rs. 1.68-lakh per sq. yd.

Prices for residential areas have been raised from Rs. 19,200 to Rs. 24,960, while agricultural land in rural areas up from Rs. 36-lakhs, is now available for Rs. 48.8-lakhs per acre, while panchayat owned land (including fertile and infertile) costing Rs. 93-lakh for a two kanal plot, will now go for 117-lakhs. Meanwhile, the highest price for other villages falling within UT purview, remains the same at Rs. 28.8-lakh per acre.

Real estate analysts confirm, a one kanal residential plot in Chandigarh now sells for Rs. 2.5-crore to Rs. 3-crore, while a similar plot in Panchkula, Haryana, will go for Rs. 1.5-crore. These rates are the result of the computation of the average of the three previous auctions that were conducted by Chandigarh administration. Since, official collector rates in comparison were much lower, actual transaction money flowing in could not be accounted for, resulting in huge losses for the administration and a greater proliferation of black money.

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