Real estate is a tricky business! Not just the process and method but even the terminologies. The technical real estate language is grasped and comprehended by some while others get stuck. However, there are certain terms that one must know about the real estate industry to gain knowledge about this sector.
There are three terms which we are covering in this article and are crucial to know when investing or indulging in the real estate domain. Let us start with the first one which is-
Going by the proper definition, Circle rates are the minimum value of any particular property or plot or a commercial area at which the concerned property can be sold. This circle rate is set by the government’s local development authorities or the state’s revenue departments keeping in mind the condition of the property.
But people often get mixed up between circle rate and market rate. Both are very different from each other! Circle rate is said to be the best and the lowest rate at which space could be sold whereas market value of a property or plot depends on a list of conditions such as infrastructure, demand, supply, location and so on. Market rate will always be higher than the circle rate.
The Next term is-
This is one of the common terms people often hear in real estate. The term Stamp Duty refers to the amount of tax that is levied on the transaction of property and is to be paid by the buyer. To have legal ownership over the concerned property a buyer must pay stamp duty to the government. Stamp duty needs to be paid in all sorts of property transactions such as land or be it apartments. The amount of stamp duty is on the basis of the value of the property at the time of registration. The calculation of stamp duty for plots and the independent houses is easy and straight, but for apartments, the owners have to pay the duty in accordance with the undivided shares of the concerned building.
Failure in payment of stamp duty leads to punishment and penalty hence people are advised to pay stamp duty without delays. Stamp duty is different in every state, it varies. For example, Tamil Nadu has its own set of laws for stamp duty in order to simplify the process of the home for sale.
And the third term is-
The process of owning a house remains incomplete without the proper registration of the property under the name of the new homeowner. A person after paying the stamp duty, he or she should then get the asset registered from the Sub-registrar of Assurances.
For all the properties which amount to more than Rs 30,000, there is a registration charge which is applicable. The registration charges also vary and are usually Rs 1 percent of the market value or the agreement value (mostly the one that is higher is taken). After paying the registration charges, one becomes a complete and legal owner of the property.