Delhi property prices: Delhi property prices have already risen by 43% since the start of the pandemic and it will only get more expensive this year | India Business News

NEW DELHI: Buying property in the capital is set to become more expensive after the Unified MCD proposed to raise the transfer fee by 1% on the purchase of properties priced above Rs 25 lakh. The transfer tax will be 4% for men (currently 3%) and 3% for women (currently 2%), once the proposal is approved.
The Delhi Municipality may levy a tax on transfers or sale of real estate within the city limits. The duty is levied in addition to the duty imposed by the Indian Stamp Act 1899 in Delhi. Apart from the sale of buildings, transfer duties are levied on donations of buildings, mortgages with possession of buildings and perpetual leases of buildings.
According to industry experts, this decision will mainly impact high-value secondary sales.
“The proposed increase in transfer fees will increase the impact of transaction costs on transfer cases. This decision would involve an additional landed cost for the secondary purchase. This decision will add marginally to the lucrative property purchases in the market primary from the developer, which could slightly soften the purchase in the primary market. On the other hand, the money collected in the account will involve better funds from the urban local bodies to undertake the improvement of infrastructure and services in the city,” said Ashutosh Kashyap, Director, Advisory Services, Colliers India.
“This decision places an additional burden on property buyers. At a time when interest rates on home loans have already started to rise and the Reserve Bank has indicated a further increase in key rates to stubbornly control inflation high, the decision to raise transfer taxes will jeopardize the sector’s much-needed recovery,” said Amit Goyal, CEO of India Sotheby’s International Realty.
Delhi-NCR has already seen the highest 11.3% year-on-year rise in house prices to Rs 7,363 per sq.ft during the Jan-March 2022 period as developers raise prices due to robust demand and rising input prices, the Credai-Colliers – Liases Foras Housing Price Tracker Report 2022 shows.
Property prices in Delhi alone have risen by 43% since the start of the pandemic two years ago.
According to a recent Reuters survey, property prices in Mumbai and Delhi, including the surrounding National Capital Region, are expected to increase by 4-5% this year and next. “Improving demand and an increase in inflationary trends for basic raw materials in construction, including cement, steel and labor, are the main factors likely to push property prices north,” said Anuj Puri, President of ANAROCK Property Consultants.
“Legal payments and taxes increase the cost of home ownership and force buyers to spend more savings or take out bigger loans. Overall, an extra 1% isn’t huge, but it will still pinch buyers of all kinds. This rise may also contribute to a minor rise in house prices,” said Adhil Shetty, CEO of Bankbazaar.com.
In Delhi, properties are divided into eight categories A, B, C, D, E, F, G and H based on their geographical location and the Delhi government levies stamp duty on the sale and purchase of properties .
Classy and upscale settlements fall into category A and B such as Golf Links, Vasant Vihar, Sunder Nagar and Jor Bagh. Neighborhoods of middle income groups belong to categories C and D, which include localities like Lajpat Nagar, Alaknanda, Bhogal, Amar Colony, among others.
Localities such as Geeta Colony, Anand Parbat, Seikh Sarai fall under Category E, F, G, H areas.
Transfer duty is levied in addition to stamp duty. The hike will only be applicable on transfer duties and will not impact buyers aiming to purchase properties priced below Rs 25 lakh.
With agency contributions