While going through the process of finalizing their dream home, it is essential that buyers understand all the steps involved in this task – from deciding on location, type of house, budget etc to understanding all the legal requirements and associated costs.
It is essential for the buyer to be aware of all regulations during his/her home buying process. Regulations can differ on a locality level and can also vary depending on the type of property being purchased. There has been a conscious attempt by regulatory body to make information easily accessible to all through the internet. Processes are also being simplified thus making property purchase a lot easier.
Registration of the property is a vital step in the property purchase process. This ensures that the property is under your name in all Government records. This is done by paying the requisite stamp duty charges and registration fees to the State Government. The stamp duty charges and registration fees are determined by the circle rate of that area and are generally a percentage of the actual transaction value.
Ready Reckoner Rate / Circle Rate
Ready Reckoner Rate or Circle Rate is the minimum rate at which a property can be registered in the event of its transfer from one owner to another. The circle rate is determined by the State Government and is revised periodically. These differ across different states.
Ready Reckoner rates can also differ within localities/cities in a state and may also vary depending on the type of property being transferred. This rate generally determines the market value of the properties in a particular area.
A property must be registered on the actual transaction value or at the prevailing circle rate, whichever is higher. Incase a property has been sold at a price lower than the existing ready reckoner rate, the property will have to be registered at the prevailing ready reckoner rate. For example, if a property has been sold at Rs 1,800 per sft but the ready reckoner rate in that area is Rs 2,000 per sft, the property will have to be registered at Rs 2,000 per sft.
The stamp duty and registration charges are an important source of revenue for the Government and simultaneously ensure that ownership of the property is clearly reflected. Buyers must be aware of availing ready reckoner rates before finalizing their transaction.