Haryana Govt. revises development charges to 5 percent of collector rate.

The Haryana Urban Local Bodies (ULB) department has linked the development charges with the collector rate. Now the development charges will be levied at five percent of the rate. The move will increase or decrease the home values whenever the collector rate fluctuates.
Of late, the Urban Local Bodies (ULB) department of the Haryana government has linked the development charges to the collector rate. The move is said to impact the real estate transactions as the development charges will be levied at five percent of the collector rate.

What are development charges?

Development charges are a one-time fee paid by the developer to the local civic authority. The amount set by the municipal body may be utilised to facilitate amenities, such as roads, water, electricity, and drainage, among others. As builders pass on this amount to end-buyers, any revision in these charges may impact the realty sentiment in the region.

What is collector rate?

Collector/circle/ready reckoner rate or guidance value is the minimum amount set by the State for a locality at which a transaction can be done in the area. The collector rate varies across localities and is generally revised quarterly or bi-yearly by the State. The rate is a significant component of the stamp duty and registration process.

Reaction to Haryana ULB department's announcement

Congress General Secretary and former Haryana minister Randeep Singh Surjewala has expressed strong disapproval of the decision, stating, “The ULB’s latest directive will lead to homebuyers shelling out close to Rs 2 lakh to get a 100 sq yard map approved. Also, linking it to collector rate implies a hike in the development charges whenever the rate rises. As the department controls 70 percent of the State’s urban area, the move is detrimental to the masses.”

However, defending the department’s decision, ULB minister Kamal Gupta stated, “Development charges are integral for the smooth running of any civic body. The revised rates are affordable. Besides, the fee charged will be utilised to provide better amenities to the locals.”

Since 2013, development charges have been between Rs 50 and Rs 150 per sq yard. However, the current increase is 5-10 times the previous charges, which is likely to burden the residents.