The rise and fall in the circle rate decide the mood of a real estate market. Thus, being aspiring homeowner you must be aware of what this rate is and how it is relevant while purchasing a property. So, this blog post not only outlines the idea of circle rate but also let you, the reader know about the concept, significance, its effects on the home Buyer, property market and its importance one by one. Scroll down the page and read more about the same:
- What is Circle Rate alias Reckoner Rate
The Circle rate is also termed as Ready Reckoner [RR] rate in some parts of the country. In the national capital city Delhi and its adjoining areas including the NCR region people are familiar with the term Circle Rate, whereas the real estate market and people of the Mumbai city know this term as the Ready Reckoner [RR].
- Concept of Circle Rate
The Circle rate is an approximate value of properties set by the Government in a designated location which restrict the realtors and people from conducting any property transaction deal for less than the fixed amount. This rate not only varies from State to State but sometimes the circle rate also differs from city to city. The Circle rate is valued while considering several factors. In short, this is the minimum amount payable to purchase property as the Stamp duty and Registration fee are then charged on this amount which calculates to the final payable amount at the time of buying a property.
- How Circle Rate Affects Real Estate Market Transactions
The main difference between a Circle Rate [CR] also known as the Reckoner Rate [RR] and the actual property prices in the market have a difference as there is no maximum amount limitation for the sale of the property. Also, here in India, the property transactions take place according to the market rate in a particular locality which includes stamp duty and registration fees that has to be paid by the home buyer. The stamp duty and registration fee both are calculated according to the current market rate. In rare cases where the RR rate is higher, the stamp duty and registration fee is calculated according to the rate.
- Importance of Circle Rate for Homebuyers
The circle rate in all localities helps you to save and plan financial funding in order to purchase a home in the particular area. This is possible as the CR aka Circle rate keeps you aware of the minimum amount payable for owning property in the given area and thus you save in a disciplined manner in order to pay for token money and other procedures like stamp duty and registration fee. The difference between both CR and the market rate reflect on the buyers as people prefer purchase of property when the difference between circle rate and the market rate is less as it helps in shelling out of lesser money for owning property in the desired location.
- Revision of Circle Rate
This rate is usually low in comparison to the current rate in the real estate market and the Government keeps on revising this rate in order to maintain a minimum possible difference between Circle rate and the market rates at which the property transactions can be carried out.
So, keep a tab on the circle rate where you wish to buy property as it helps you seal a deal when the circle rate is at its minimum.