Bihar raises circle rates: Here's what it means for property buyers and sellers

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Planning to purchase a home in Bihar? You may have to bump up your budget to buy your dream home as the state government on Thursday increased registration rates for land and properties in rural and urban areas.

Under the revised minimum value register (MVR), or circle rates, rural land rates have been increased by 60%, while urban rates have been doubled. Alongside, an annual 5% increase in MVR has also been introduced. The general stamp duty rate has also been increased by 1%.A circle rate is the minimal amount that the government sets for properties in a specific area, below which they cannot be registered. Each state keeps its own list of circle rates, which is updated on a regular basis depending on things like infrastructural development, market trends, and geographic location.

Even within the same state, these rates may vary from one neighborhood to another.According to a notification issued by the prohibition, the excise and registration department, the revised rates are to be implemented with immediate effect. Also, every three years, the department will now conduct a thorough review of the rates that will consider new highways, industrial zones, urban growth, and significant infrastructure projects including railroads, airports, industrial parks, and irrigation systems.

Whom does it benefit?According to the government, this revision is likely to offer higher compensation to farmers for land acquisition and increased discount to women in property registration. For land or property registered in a woman’s name through a sale deed or gift deed, the concession on stamp duty has been increased from 0.3% to 0.4%, while the 0.1% concession on registration fees remains unchanged. This raises the total concession available to women to 0.5%.“This influx of funds is expected to improve the economic condition of the state’s farmers and citizens while accelerating the state’s economic development. Consequently, farmers will receive a total of Rs 14,831 crore in additional compensation under the revised rates,” a govt press note stated.Land acquisition compensation set to rise The government has announced that compensation for land acquired for state-run projects will go up from Rs 14,897 crore to Rs 18,637 crore, putting an extra Rs 3,740 crore in the hands of landowners.

The central government projects will see an even bigger jump, with compensation expected to increase from Rs 24,629 crore to Rs 39,460 crore under the new rates.Alongside this, the government has introduced uniform land classification norms across the state, creating seven categories for rural and peripheral zones, and six categories for urban and metropolitan areas.How does it affect what you pay?The circle rate or the agreed-upon property value, whichever is higher, is used to determine stamp duty and registration fees which are to be paid when registering a property.

It also acts as a benchmark for determining these charges.Buyers can bargain with sellers more successfully if they are aware of the circle rate as they can determine whether the vendor is asking for a reasonable price or not. By offering a benchmark for figuring out a property's fair market worth, circle rates help with property valuation