Bengaluru: Rush to register properties before guidance values rise

A few agents have seen the number of registrations per day increase by at least 50 per cent over the last week.

The budget announcement on the revision of property guidance values has triggered a sharp rise in real estate queries and registrations.

Real estate agents and property consultants across Bengaluru told DH that there is a huge rush with the number of queries going up by at least 30 per cent. A few agents have also seen the number of registrations per day increase by at least 50 per cent over the last week.

Data accessed by DH from the Department of Stamps and Registrations showed a rising trend. According to the data, 96,549 property registrations have taken place in the state between July 1 and July 12, a 22 per cent increase compared to the average of the last three years. Average registrations over the last three years (between July 1 and July 12) stood at 78,963.

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"The rise in guidance value will not only increase the stamps and registration charges paid to the government but will also increase the income tax the buyer has to pay. The rules mandate a TDS (tax deduction at source) of 1 per cent for any property transaction over Rs 50 lakh," explained Ramesh K, a property consultant.

Balamurali Krishna of the Raja Rajeshwari Real Estate agency said the number of registrations could go up even further. "Usually, during the Ashadha month, people tend to avoid registrations. This year, there is a rise even during this period. Many buyers have got the papers ready and want to get the property registered as soon as the Ashadha month ends. Registrations will increase drastically from next week," Krishna said. He added that over the last week, the number of registrations had gone up from 35 to 40 a day to 60 to 65.

Another real estate agent said the rush is mostly from those who are in the last leg of finalising the purchase. "Many finalise the property and take time to register it either because of financial constraints or other beliefs. Such people are now speeding up the process," said Pradeep M, a real estate agent from south Bengaluru.

However, this could also hurt the market in the long run, opined Suresh Hari, chairperson, CREDAI Bengaluru. "In a few cases, people might cancel bookings owing to the increased financial burden. Given that the market is now recovering from the pandemic-induced losses, the rise in guidance value will discourage new buyers. Also, once the revisions come into force, transactions will decline," Hari said.