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How to Calculate Circle Rate for Builder Floor in Gurgaon: A Step-by-Step Guide
When purchasing a property in Gurgaon, especially a builder floor, understanding the circle rate is crucial for both buyers and builders. The circle rate, also known as the minimum rate of land or property fixed by the government, is the benchmark value for property transactions. It helps in determining the stamp duty, registration fee, and overall tax obligations. In this blog post, we will break down the process of how to calculate the circle rate for builder floors in Gurgaon, ensuring that you are well-informed before making any real estate decisions.
What is Circle Rate?
The circle rate is the minimum price at which a property can be bought or sold, as set by the state government. It is different from the market price and acts as a reference point for calculating taxes, stamp duties, and other charges involved in property transactions. The rate varies based on several factors such as location, type of property, amenities, and other criteria that influence the real estate market.
How is the Circle Rate Determined?
In Gurgaon, the Haryana Urban Development Authority (HUDA) or the local municipal corporation determines the circle rate. These rates are updated periodically and can vary depending on the area within the city. The circle rates are classified according to zones, such as residential, commercial, industrial, and agricultural, with each zone having its own set of rates.
Factors Influencing Circle Rate:
- Location: The circle rate is highly influenced by the area’s proximity to key infrastructures like roads, schools, parks, commercial hubs, and transport systems.
- Property Type: Builder floors, being residential properties, typically have a separate circle rate compared to independent houses, apartments, or plots.
- Amenities: Properties with better amenities, such as luxury features, parking, and prime views, can have higher circle rates.
- Land Usage: The classification of the land (residential, commercial, or industrial) can also affect the circle rate.
How to Calculate Circle Rate for Builder Floors in Gurgaon?
Here’s a step-by-step guide on how to calculate the circle rate for a builder floor in Gurgaon:
1. Identify the Property’s Location
The first step is to determine the exact location of the builder floor. Circle rates differ depending on the area’s zone. Gurgaon is divided into various sectors and zones, each with different circle rates. For instance, sectors like 29, 31, 56, and 57 may have higher rates than sectors farther from the main city.
2. Check the Property’s Type
Builder floors are typically classified as residential properties. To find the applicable circle rate, you’ll need to determine whether the property is categorized as a single unit (builder floor apartment) or a multi-floor building. The government circle rate for builder floors will usually apply to single-unit properties, but multi-floor properties could have different calculations.
3. Refer to the Circle Rate List
The Haryana government releases an official circle rate list, which is available on the HUDA or Haryana government website. This list contains the rates for various sectors in Gurgaon, based on location and type of property.
For example, if you are purchasing a builder floor in Sector 56, the circle rate for residential properties in this sector might be different from the rates in Sector 92. The rate is typically mentioned in terms of per square yard or per square meter.
4. Calculate the Total Circle Rate for the Property
Once you have the circle rate applicable to your property, the next step is to calculate the value of the property based on its size. If the circle rate is set at ₹10,000 per square yard and the builder floor occupies a plot of 200 square yards, the calculation would be:
[
\text{Circle Rate Value} = 200 \, \text{sq yards} \times 10,000 = 20,00,000
]
This value will be considered the base price of the property for calculating stamp duty and other charges.
Circle Rate Gurgaon: Calculate Property Value for Stamp Duty Payment
For calculating a property’s stamp duty charge using the circle rate in Gurgaon, follow these steps:
- For Apartments or Flats: The formula for calculating the stamp duty based on circle rate is:
[
\text{Stamp Duty Value} = \text{Carpet Area (in sq ft)} \times \text{Circle Rate per sq yd}
]
- For Builder Floors Constructed on Independent Plots: The calculation is slightly different. Here, you calculate the property value by multiplying the carpet area of the builder floor by the circle rate per square yard.
[
\text{Stamp Duty Value for Builder Floor} = \text{Carpet Area (in sq ft)} \times \text{Circle Rate per sq yd}
]
For example, if the carpet area of a builder floor is 1,200 sq ft and the circle rate is ₹15,000 per square yard, the calculation would be:
- Convert the carpet area to square yards (since 1 square yard = 9 square feet):
[
\text{Carpet Area in sq yards} = \frac{1,200}{9} = 133.33 \, \text{sq yards}
] - Multiply by the circle rate:
[
\text{Stamp Duty Value} = 133.33 \times 15,000 = 20,00,000
]
Once you have the total value, the stamp duty and other charges like registration fees can be calculated based on the applicable rates.
5. Calculate Stamp Duty and Registration Charges
Stamp duty is calculated as a percentage of the circle rate value, and registration charges are also based on the same. For instance, if the stamp duty is 7% and the circle rate value is ₹20,00,000, the stamp duty would be:
[
\text{Stamp Duty} = 20,00,000 \times 7\% = 1,40,000
]
Similarly, the registration fee is calculated as a percentage of the circle rate value, usually between 1% and 2%, depending on the type of transaction.
6. Consider Any Additional Charges
Apart from the stamp duty and registration charges, there may be additional charges such as legal fees, paperwork fees, and VAT (Value Added Tax) on the builder floor property, depending on the specifics of the deal.
Example Calculation:
Let’s go through an example:
- Location: Sector 56, Gurgaon
- Circle Rate for Builder Floor: ₹15,000 per square yard
- Plot Size: 150 square yards
- Carpet Area: 1,200 sq ft
Step 1: Calculate the total value of the property.
[
\text{Circle Rate Value} = 150 \, \text{sq yards} \times 15,000 = 22,50,000
]
Step 2: Calculate the stamp duty (let’s assume 7%).
[
\text{Stamp Duty} = 22,50,000 \times 7\% = 1,57,500
]
Step 3: Registration charges (let’s assume 1%).
[
\text{Registration Charges} = 22,50,000 \times 1\% = 22,500
]
Why is Circle Rate Important?
- Property Transactions: The circle rate serves as the basis for determining the minimum value at which a property can be bought or sold, ensuring transparency in real estate transactions.
- Tax Calculation: Stamp duty, capital gains tax, and other government taxes are calculated based on the circle rate, making it an essential factor for both buyers and sellers.
- Avoiding Tax Evasion: By ensuring that properties are bought and sold at or above the circle rate, the government minimizes the chances of tax evasion or underreporting the property’s value.
Conclusion
Understanding how to calculate the circle rate for builder floors in Gurgaon is essential for anyone involved in real estate transactions. It ensures transparency in property dealings, helps calculate taxes, and avoids legal complications. Always refer to the updated circle rate list issued by the Haryana government and consult a real estate expert or legal advisor for specific details related to your property transaction.