JOIN USGuidance value hike likely every year
Presently, there is a huge difference between the guidance value and the market rate of properties in Bangalore and other major cities and towns of the State. On an average, the market value is 30 per cent more than the proposed increase in guidance value in Bangalore.
The departments can almost double their revenue from stamps and registration sources if the guidance value is brought on a par with the market value. It will also prevent the flow of black money into the real estate sector. But the department is shying away from doing so fearing public outcry as it will push up the property prices.
“We cannot do it in one go. We have to keep public interest in mind while revising the value. Hence, we are planning to revise the value every year,” Inspector General of Registration and Commissioner of Stamps B Shivappa said. Though it is mandatory to revise the guidance value every year as per the Karnataka Stamp Act, the department is not following the rule book. The guidance value was last revised in April 2007. The department has left the decision to revise the guidance value to the Central Valuation Committee, comprising officials of key government departments, and representatives of industry bodies.
The department was actually armed with a detailed report to bridge the gap between the guidance value and the market value. The study conducted by a private real estate consultant agency on behalf of the department had drawn up a plan to bridge this gap.
Official sources said increasing the guidance value on a par with the market value in one go would badly hit the prospective property buyers, especially middle income group, as the costs become unaffordable. Besides, it will also prove detrimental to the real estate industry.
For instance, stamps duty and registration fee (at 7.72 per cent chargeable at the time of registration of sale deed) for a 2,000 sq ft apartment on Bull Temple Road in Basavanagudi at the proposed increase of guidance value (4,180 per sq ft) will be Rs 6.45 lakh. Presently, it is Rs 4.70 lakh (at 3,080 per sq ft). Besides, the department has a plan to set up a separate cell to keep track of the real estate market and assist the valuation committee to fix the guidance value scientifically. Presently, the valuation committee revises the guidance value based on the recommendation from the sub-registrars.
Bridging the gap
* Stamps and registration dept planning annual revision of guidance value
* Annual revision aimed at bringing guidance value on a par with market value
* Presently, market value is about 30 per cent more than guidance value in B’lore