Real estate in Karnal braces for jolt as collector rates jump by up to 70%

The sharp hike in collector rates across Karnal district, set to come into effect from tomorrow, has triggered anxiety among property buyers, sellers and dealers. Many fear the steep revision will stall deals, increase dependency on white money and slow down the real estate market in the short term.

Deals will be difficult to execute

The government should have given a notice period of at least two months. Many deals were already finalised or at the finalisation stage, and the sudden hike has made these difficult to execute. — Vijay Batra, vice-president, karnal property dealers association

In Karnal city alone, collector rates have seen a rise of up to 70%, with substantial increases across residential, commercial and agricultural categories.

According to sources, in several localities, real estate transactions were already taking place at or near the revised rates. However, due to lower earlier collector rates, a portion of the transaction value was often paid in cash, helping buyers save on stamp duty and registration fees.

“Now, with collector rates being brought closer to market prices, buyers must legally declare the full amount, leading to increased use of white money. It may make for many to arrange additional funds through formal banking channels, but it will increase stamp duty,” said a Revenue Department official.

The official said, “The actual buyer will be able to purchase plots,” he said, referring to better access to loans due to accurate documentation of property value.

However, property dealers painted a more troubled picture. Several said ongoing deals were stuck midway, urging the government to review the decision.

“Earlier, there used to be a hike of up to 10%, but this time, the increase is steep and will certainly affect the sale and purchase of properties,” said Shalindar Katyal, former president of the Karnal Property Dealers Association. “Full-payment agreements or simple property transfers may replace formal registrations,” he cautioned.

Vijay Batra, vice-president of the association, expressed concern over the suddenness of the decision. “The government should have given a notice period of at least two months. Many deals were already finalised or at the finalisation stage, and the sudden hike has made these difficult to execute,” he said. He added that the hike should have been capped at 10 percent as in previous years.

Shashi Pandhi, president of the Ansal Property Dealers Association, highlighted a mismatch between collector rates and actual sale prices. “The hike in some colonies is very high, while market prices remain lower. This mismatch will hurt genuine buyers. The government should reconsider the rates. Common people cannot manage this sudden capital gain pressure,” he said.

Adding to the confusion, Lalit, a member of the Karnal Property Dealers Association, said collector rates were revised twice in just one week. “First, rates of 54 licensed colonies were increased last week, and now again, those very colonies have seen another hike. It’s causing disruption and confusion in the market,” he said.