Thanks to the sharp hike in circle rates in the capital?from 15% to 250%?the Delhi government?s revenues are all set to go up hugely, by R800 crore or thereabouts from the increased stamp duty paid on sales that are registered as well as from annual property taxes which are based on the circle rate. But more than the hike in tax collections?circle rates were doubled just six months ago?what this will do is to further clean up the black market in real estate deals. As is well known, since property rates are much higher than the circle rates?the rates at which properties have to be registered and the basis on which stamp duties have to be paid?this encourages the generation of black money. A property worth R1 crore could have got registered for R40 lakh earlier, with the balance being paid in black?if the circle rate now values the property at R70 lakh, the black component automatically gets reduced to R30 lakh.
Coming as it does soon after the Supreme Court ruled that properties could no longer be sold on the basis of power of attorney but have to be based on registered sale deeds, this is another step to clean up the realty sector. Other states now need to follow Delhi?s example. And given how real estate forms such a large source of revenue, this will also improve states? financial health.