Chandigarh’s PRs ICE PAIN!

The proposed hike in collector rates by the Chandigarh Administration earlier this week is expected to slow down the real estate market in the city, with experts warning of a decline in property transactions and potential revenue loss for the government.

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As per the draft schedule released on Wednesday, the administration has suggested a 130 per cent increase in collector rates in Sectors 1 to 12, 96 per cent in Sectors 14 to 37, and 80 per cent in Sectors 38 and beyond.

Similarly, an increase of nearly 30 per cent in the Industrial Area (Phase I and II) and 20 per cent for SCOs, SCFs, and bay shops in key commercial hubs like Madhya Marg, Sub-City Centre (Sector 34), and Sector 22 has been proposed.

The final notification will be issued on March 25, with the new rates applicable from April 1.

The hike will lead to higher stamp duty, potentially increasing residential property prices by 8-10 per cent and commercial property prices by 5-6 per cent, say real estate experts.

Kamal Gupta, president of the Property Consultants Association, Chandigarh, expressed concern that the increase in stamp duty would drive potential buyers to neighbouring cities like Mohali and Panchkula, where collector rates are comparatively lower.

“With a hike in collector rates, property prices are likely to drop due to the lack of buyers, impacting both the market and government revenue,” he said.

Industry mavens argue that current collector rates are already higher than market prices and this has caused stagnation in real estate transactions in the city.

For instance: The present collector rate for an SCO in Sector 26 and Sector 7 on Madhya Marg is Rs 33.43 crore, with a proposed hike to Rs 39.26 crore, while the actual market price is around Rs 25 crore.

The collector rate of a corner SCO in Sector 17 is set to rise from Rs 35.30 crore to Rs 41.43 crore, though the market value remains at Rs 25 crore.

Similarly, a non-corner SCO in Sector 17 is priced at Rs 17 crore in the market, while the proposed collector rate is Rs 27.43 crore.

Kamaljit Singh Panchhi, president of the Property Federation Chandigarh, along with general secretary Amit Jain, warned that higher collector rates could make home ownership unaffordable for middle-class families and first-time buyers.

They also cautioned against market instability, which could discourage investors and slow real estate transactions.

Panchhi highlighted that rural residential collector rates are set to increase nearly fourfold, while commercial property rates in villages may rise fivefold as a fallout of this move.

He urged the Administration to reconsider the decision, stating that stopping share-wise registries has already created hurdles for property owners in the city and this hike will sewrve as another nail in the coffin of the realty sector in the city.

“While revenue collection is essential, increasing collector rates is not the ideal solution. Instead, business-friendly policies, such as allowing share-wise sales, can enhance revenue while fostering economic growth,” Panchhi said.

Real estate experts emphasised that commercial property prices in Sectors 7, 17, 22, 26, and 34 are already lower than the existing collector rates.

They suggested that instead of raising rates, a reduction would facilitate stalled transactions and prevent further revenue loss.

With concerns mounting over the proposed hike, stakeholders are now awaiting the final notification on March 25, hoping for a revision in the administration’s decision.