Planning to purchase a home in Bihar? You may need to increase your budget as the state government has revised registration rates for land and properties in both rural and urban areas. Under the updated minimum value register (MVR), or circle rates, rural land rates have increased by 60%, while urban rates have doubled. Additionally, an annual 5% increase in MVR has been introduced, and the general stamp duty rate has risen by 1%.
Understanding Circle Rates
A circle rate is the minimum price set by the government for properties in a specific area, below which registration is not allowed. Each state maintains its own circle rate list, updated periodically based on factors like infrastructural development, market trends, and geographic location. These rates can vary even within the same state from one neighborhood to another.
Revised Rates and Review Mechanism
According to a notification from the prohibition, excise, and registration department, the revised rates are effective immediately. The department will now conduct a thorough review every three years, considering new highways, industrial zones, urban growth, and significant infrastructure projects such as railroads, airports, industrial parks, and irrigation systems.
Who Benefits from This Revision?
The government states that this revision aims to provide higher compensation to farmers for land acquisition and increased discounts to women in property registration. For land or property registered in a woman's name through a sale deed or gift deed, the stamp duty concession has increased from 0.3% to 0.4%, while the 0.1% concession on registration fees remains unchanged, raising the total concession for women to 0.5%.
“This influx of funds is expected to improve the economic condition of the state’s farmers and citizens while accelerating economic development. Consequently, farmers will receive a total of Rs 14,831 crore in additional compensation under the revised rates,” a government press note stated.
Land Acquisition Compensation to Rise
The government announced that compensation for land acquired for state-run projects will increase from Rs 14,897 crore to Rs 18,637 crore, putting an extra Rs 3,740 crore in landowners' hands. For central government projects, compensation is expected to jump from Rs 24,629 crore to Rs 39,460 crore under the new rates.
Additionally, 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 This Affect Buyers?
The circle rate or the agreed-upon property value, whichever is higher, is used to determine stamp duty and registration fees payable when registering a property. It also serves as a benchmark for these charges. Buyers can negotiate better with sellers if they understand the circle rate, as it helps determine whether the vendor is asking a reasonable price. Circle rates aid in property valuation by providing a benchmark for fair market worth.
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