Recently Department of Stamps and Registration, Govt of Karnataka revised guidance value for properties belong to Bangalore Urban, Bangalore Rural and Ramanagara District. So let us view the heat of the same 🙂
Let us first understand what is the guidance value of property. It is the value below which you can’t register your property. But there are few exception rules to it. Suppose Govt guidance value of the property you are interested to buy is around Rs.10,000 per square feet, but you felt that this is at the higher side than the market rate. If you showed the value is below than the guidance value then sub-registrar refers it to district registrar. District registrar after reviewing the property fix the guidance value. This value is final and you need to pay the tax on this. It may be equal or higher to guidance value. But usually the market value will be higher in all cases when one look at the madness about property investment.
In guidance value there are two types.
1) Land Value-This value is only for lands not for any constructed properties. Hence an open site value is measured as land value.
2) Composite Value-This value is for the constructed properties where it includes both land value as well as the value of buildings.
In Bangalore property guidance values are revised to the tune of 40% to 100% in some areas. It was revised last time in September 2011. By raising this value Govt is indirectly increasing its revenue. Also there is an expectation that the Govt is going to increase stamp duty and registration fee. Currently in Karnataka State stamp duty is 5% and 1% as registration fee. So total one need to pay 6% as the cost of registration.
Few feel that time being it will impact property investment. But going by the craze of the investors, I feel it as a temporary pause. Usually builders and developers increase their margins too based on the revision of guidance value. So it directly increases the property value in Bangalore. Let us find out guidance values of few popular areas of Bangalore (open sites).
As of now I come to know that the revised values will be applicable from August 12th 2013 (Times of India dated August 13th 2013). But there is no updation available from the Govt site. Also the above prices still showing as temporary rates subject revise based on the public opinion.