JOIN USGovt tying up with IIMB to fix guidance value for apartments
Evaluation of immovable properties in Bengaluru for fixing the guidance value is set to become more scientific from this year onwards.
The department of stamps and registration will sign a memorandum of understanding with the Indian Institute of Management, Bangalore, to fix the guidance value for immovable properties, in particular apartment complexes, according to sources in the government. The MoU would be signed in a couple of days with the IIMB-Century Real Estate Research Initiative, which is into interdisciplinary research on the Indian real estate sector.
At present, the department fixes the guidance value zone-wise but eventually plans to fix the value for each property. In the initial phase, it would focus only on apartment complexes.
The value of an apartment complex would be assessed based on facilities like swimming pool, gym, clubhouse, walk path etc. Such assessment would naturally push up the guidance value for properties. Apartment complexes with more than 25 flats would be assessed under the new method.
There are nearly 12,000 apartments in the State. The IIMB’s research wing has developed a data bank on apartment complexes in Bengaluru. But the department doesn’t have such data. The formula to calculate the guidance value would become more scientific if facilities at a housing cluster are taken into consideration.
The new method—to be adopted from April or May onwards—would marginally increase the revenue earning for the department, the sources said. Officials insist there are complaints about the disparity between guidance value and the market rate of a property. As a result, the government is losing out on revenue in terms of registration fee and stamp duty.
About 75 per cent of the revenue through stamps and registration is generated in Bengaluru. The department has therefore decided to introduce the new valuation method in the City before extending it to the entire State.
The IIMB research wing would assist the department in giving information about apartment complexes. The department is, however, keen on covering each and every property with the help of GPS (Global Positioning System) and computerise the data.
While Bengaluru is seeing an unprecedented growth in construction of apartment complexes, the development hasn’t helped much in boosting stamp duty and registration fee in the current financial year. The government had aimed to collect Rs 7,450 crore as tax in the current fiscal year but the collection has been only Rs 6,196 crore so far. The receipts could go up by Rs 700-730 crore by the end of March, falling well short of the target.
But officials say the target was unrealistic in the first place. The government expected the real estate sector to grow by around 19 per cent, four per cent up from last year. But such growth cannot take place when the construction industry is facing acute shortage of sand and steep increase in the prices of cement and steel, they argue.