What will be the effect of increase in circle rate?
Buying property in Bihar has now become much more expensive than before. The state government has made major changes in the Minimum Value Register (MVR) i.e. circle rate. Under the new system, the minimum land prices in urban areas have been increased by up to 100 percent, while in rural and peripheral areas the circle rate has been increased by 1.6 times. The Department of Prohibition, Excise and Registration approved this amendment on Thursday and the new rates have come into effect across the state. After this increase, land rates have increased from big cities to villages of the state. The price of land in Raxaul which was earlier being sold at Rs 6 crore per katha i.e. about Rs 44 thousand per square foot, has now gone up to Rs 88 thousand. In Kattha it has become Rs 12 crore. Rates have doubled in Patna also. Not only this, the government has increased the circle rate as well as stamp duty by 1 percent.
The new rates will have a direct impact on property registration costs. The state government has increased the stamp duty by 1 percent from 7 percent to 8 percent. Apart from this, buyers will also have to pay 2 percent registration fee. This means that now you will have to pay 3 charges for purchasing land, although earlier also there were the same 3 charges but now you will have to pay more in your pocket. The government has made this major change in the circle rates of rural areas after 2013 and in the circle rates of urban areas after 2016.
These are the changes that have happened
Women have got additional exemption
- 5% discount will be given on registering land or house in the name of women.
- The benefit of this exemption will be available only on property registered in the name of a woman.
- Of the total discount, 4% relief will be given in stamp duty.
- There will also be a discount of 1% in registration fees.
- The government aims to encourage women to become property owners.
The price increased so much in major cities
Due to this decision taken by the Bihar government, the prices of land in big and VIP cities like Patna, Raxaul have doubled. Apart from this, prices of residential, commercial and agricultural land have also increased in other cities like Muzaffarpur, Gaya, Nalanda, Gaya. Talking about Muzaffarpur, the price of land in Mushahari area whose MVR was earlier Rs 4.39 lakh per katha i.e. about Rs 323 per square foot, has increased by 60 percent to Rs 7.03 lakh per katha.
Source- Bihar Government
If we look at Gaya district, the price of residential land which was earlier priced at Rs 253 per square foot, has now become Rs 509. If we look at Kattha, the price which was earlier Rs 3.45 lakh has now increased to Rs 6 lakh 93 thousand. Similarly, prices have increased in Buxar and Nalanda also.
New Property Rate
Farmers will get benefit here
On one hand, buying new land will be expensive due to increase in circle rate. On the other hand, farmers and land owners can also get a benefit from it. This benefit will be in the form of land acquisition. If the government is central or state. Whenever land is taken from farmers to build some project, it is called land acquisition. Now farmers will benefit from this. Because when the government takes the land of the farmers, it has to pay compensation as per the circle rate. If the circle rate is higher in the state then it is obvious that the farmers will get more money in such a situation.
Order Copy
According to government estimates, the compensation given on land acquired for state government schemes will increase from Rs 14,897 crore to Rs 18,637 crore. At the same time, the compensation received on land acquisition for central government projects is estimated to increase from Rs 24,629 crore to Rs 39,460 crore.
How is circle rate decided?
In Bihar, circle rate is the lowest government price of land and house fixed by the government. To decide this, recent land purchases and sales, prices recorded in the registry, market rates and development of the area are looked at. Besides, opinion of local officials is also taken. Roads, markets, schools, hospitals and transportation facilities of a place also affect the circle rate. Circle rate is not the same everywhere. This is decided differently depending on the area, road conditions and land use (residential, farming or business). The government also makes changes in it if necessary.
Overall, if we look at it, the decision taken by the Bihar government to increase the circle rate will definitely lead to an increase in the government’s revenue. But this will also increase the burden on the common man. After the increase in government rates, the impact on the prices of constructed properties is also seen. When the cost of registration and stamp increases, it directly impacts the pocket of the home and land buyer.
