Call to plug loopholes in land deals

Call to plug loopholes in land deals

Call to plug loopholes in land deals

The study has noted a gap between the GV and the market value of land in the range of 20 per cent to 200 per cent; GV more than the market value in some areas; same value for high-end projects and mid-end projects and buildings of all ages.

Other such discrepancies have been highlighted in the “Study on Recent Trends in Property Transactions in Bangalore” done by C B Richards Ellis, a private real estate consultant company, for the department.

It commissioned the study in 2010 to ascertain reasons for the slowdown in property transactions and policy bottlenecks,  make recommendations to eliminate the lapses if any and boost the real estate market in the City.

The draft report was submitted to the department recently.
The study has found huge variations in the GV in the same locality.
For instance, the GV varies between 1,500 per sqft to 2,500 per sq ft in and around Yelahanka New Town.

Big builders who are taking up premium category projects are reaping the benefit, while the government is losing revenue.

The report quotes an instance wherein the market value of a premium category project coming up near Jakkur airport is Rs 5,000 per sqft, but the GV is just Rs 1,500 per sqft. In the same locality, the market value of another project (mid-end project) taken up by the same builder is Rs 2,500 per sqft, while the GLV is Rs 2,100 per sqft, the report has noted.

The market value in most of the upmarket areas like Jayanagar, Koramangala, Hosur Road, in and around M G Road, Cunnigham Road and Ashoknagar is higher than the GV by 70 per cent to 250 per cent.

On an average, the GVs are observed to be 60 to 70 per cent of market value in Bangalore. The government is incurring about 40 per cent revenue loss due to this gap, the report stated.

The Stamps and Registration Department is preparing to revise the GV upwards in Bangalore and across all major cities in the State. The last revision was done in 2007.
The report has recommended to the department to conduct the GV revision every six months, and make it property-specific (like large projects, streetwise and type of projects).

“The GV should reflect the actual market condition and it should match the current market value. This will prevent under-valuation of properties and earn more revenue to the government,” the report has said.