Delhi to Introduce 'A+' Property Zone: Government Reviews Circle Rates
The Delhi government is considering the creation of a new 'A+' category for premium areas in Lutyens' Delhi and an overhaul of farmhouse rates to align with market realities, boost revenue, and enhance investor confidence.
DelhiReal EstateCircle RatesA CategoryFarmhouse RatesReal Estate NewsOct 27, 2025
The government had sought public feedback on the proposed revision and is currently reviewing the submissions before finalising the new rates, officials said.
Circle rates, or the minimum rates for the valuation of land and immovable properties in residential, commercial, and industrial areas, are often lower than market rates, promoting cash transactions and leading to revenue loss for the government.
The suggested measures aim to improve transparency and accuracy in property valuation and registration. They are expected to increase stamp duty collection and registration revenue, leading to greater compliance and investor confidence. According to Amit Goyal, managing director of India Sotheby's International Realty, the creation of an A+ category and a rationalised rate structure across categories A-H will modernise Delhi's valuation framework, aligning it with current market realities and ensuring fairness, transparency, and enhanced revenue efficiency.
In most of Delhi's high-end colonies, the circle rate is much lower than the market rate. This discrepancy often leads to buyers paying part of the amount in cash, while the paper value of the property remains low, attracting lower stamp duty. However, in some colonies, the circle rate is higher than the market rate, which discourages transactions.
The Delhi government's decision to review circle rates is a timely move, given that the last revision took place over a decade ago, in 2014. This revision is expected to bring greater alignment between notified and prevailing market values, thereby enhancing transparency and boosting confidence among homebuyers, investors, and developers alike, said Anshuman Magazine, chairman and CEO of India, South-East Asia, Middle East & Africa at CBRE.
Given the high land values and limited transactions in Delhi's most prestigious enclaves, experts have recommended that a new category A+ be introduced for areas such as Amrita Shergil Marg, Prithviraj Road, Dr APJ Abdul Kalam Road, Tughlaq Road, Golf Links, and Jor Bagh. These locations command benchmark prices far above other category A areas, often exceeding ₹12-₹15 lakh per square metre in open-market transactions. Accordingly, a realistic circle rate for this new category should be set at ₹10 lakh per square metre, it has been suggested. A government official said that the revenue department is actively considering these suggestions, as they could help improve the real estate market in the capital.
Experts have also called for an overhaul of the circle rates for farmhouses. Farmhouses are increasingly classified as part of urbanised Delhi, but circle rates continue to be applied at agricultural values, with prices ranging from ₹54 lakh to as high as ₹30 crore per acre, creating a huge mismatch.
'Farmhouse circle rates should be benchmarked to and differentiated by geographical zones. This will align valuations with reality, enhance transparency, and plug significant revenue leakages to the exchequer,' said Goyal.
Legal experts have also highlighted certain basic and fundamental gaps in the present concept of circle rates. 'The notification relating to the Prevention of Undervaluation Rules, which enumerates and provides the structural guidelines and framework for the mode of calculation of circle rates, lacks pragmatic market considerations,' said Gaurav Gambhir, a lawyer focused on real estate cases.
Frequently Asked Questions
What is the purpose of revising circle rates in Delhi?
The purpose of revising circle rates is to improve transparency and accuracy in property valuation and registration, increase stamp duty collection and registration revenue, and enhance investor confidence.
What is the new 'A+' category for in the circle rate revision?
The new 'A+' category is proposed for premium areas in Lutyens' Delhi, such as Amrita Shergil Marg, Prithviraj Road, Dr APJ Abdul Kalam Road, Tughlaq Road, Golf Links, and Jor Bagh, where property values are significantly higher.
Why is there a need to overhaul farmhouse rates?
There is a need to overhaul farmhouse rates because farmhouses in urbanised areas of Delhi are often valued at agricultural rates, leading to a mismatch with market prices and significant revenue loss.
How often will the circle rates be reviewed?
The proposed biennial reviews aim to align circle rates with market realities more frequently, ensuring that the rates stay current and relevant.
What are the expected benefits of these changes for the real estate market?
The expected benefits include greater alignment between notified and market values, enhanced transparency, and increased investor confidence, which will boost the real estate market in Delhi.
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