Do you know what is Guidance Value of Property? Recently Government of Karnataka revised the Guidance Value of Bangalore and whole Karnataka effective from 1st April, 2016. Let us see the meaning of Guidance Value and how it affects the property buyers.
Guidance value is nothing but a price of the property as per local Government. For example, Government of Karnataka declares the Guidance Value for Bangalore. You can’t register the property below this price. I will try to explain the same from below image.
In guidance value, there are two types.
# Land Value-This value is only for lands not for any constructed properties. Hence an open site value is measured as land value.
# Composite Value-This value is for the constructed properties where it includes both land value as well as the value of buildings.
You noticed that for Property B, the market price is Rs.8,000 per Sq Ft. But the Government Guidance Value is Rs.4,000 per Sq Ft. You can register the property at the rate anywhere between Rs.4,000 to Rs.8,000.
In the case of Property A, the market is price is Rs.2,000 per Sq Ft. But the Government Guidance Value is Rs.4,000. Hence, you are not allowed to register the property below the Government Guidance Value.
It clarifies that you are no longer allowed to register your property below the price of Government Guidance Value. However, you are free to register at any price which is above the Government Guidance Value.
Hope you now got an idea about Guidance Value.
For Government, the major revenue source is property registration. By raising the guidance value, Government expects higher revenue. Therefore, once in 3-4 years usually there will be an increase in guidance value.
Let us say Property XYZ is currently selling at Rs.4,000 Sq. Ft. and Government Guidance Value is Rs.3,000. Then there is a sudden jump in Government Guidance Value from Rs.3,000 to Rs.4,500. In such situation, property owner of XYZ will definitely not willing to sell his property less than Rs.4,5000. Becuase, he know Government itself fixed the price at Rs.4,500 then why he want to loss by selling it lesser than the Guidance Value.
In this way, whenever there is a revision in Government Guidance Value, the price of real estate will jump. It is not the affordability of buyer. But the price, below which no one ready to sell. Hence, with revision in Guidance Value, those who are in real estate business will feel happy. But the buyers feel it sad as the price of real estate will automatically raise.
Recently Government of Karnataka revised the Guidance Value of Properties. This again boosted the price rise in real estate market. The last revision was in the year of 2014. So again after 2 years one more revision. This shows how Government is eager to earn more by raising the Guidance Value of Properties across Karnataka.
The Guidance Value of Bangalore is divided into A, B, C, D, E and F zones. Zone A means highest guidance value, which starts from Rs.7,000 per Sq Ft and above. In the same way, Zone F means Rs.1,000 per Sq. Ft and more. The
This is how the Guidance Value of Bangalore is divided. (Below image is based on the guidance value of 2016)
It is hard for me to list all areas of Bangalore. Hence, I uploaded the Government notification itself. You can easily find out the area and guidance value respectively. The complete list is available “Download Guidance Value of Bangalore For 2017“.
Refer my latest post related to real estate-
Any doubt regarding Guidance Value?
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Can you please let me know the indexsation value of my property of 2500 sq. Ft with a house of 2600 sq ft on it for the year 2001. Property is located on Spencer Road, Frazer Town, Bangalore -560005, Karnataka
Dear Sushila,
It is hard for me to find and let you know each area of Bangalore's guidance value. The best idea is to visit the nearest sub-registrar office.
Hello Sir,
I have bought a duplex apartment in Kadugodi Whitefield and now going for its registration.Builder has provided a sale deed for registration purpose doing calculation based on Area guidance value and considering floor rise charges,car park and terrace and with this the agreement value comes to around 61 lacs and registration cost at 4.10 Lacs.I have a loan with SBI and they are asking me to do registration at Loan amount which is 74 lacs and with this the registration charges will shoot up by 1+ lac.I just wanted to know What's the best and most common way of going for registration which should not put me in any type of rework or rectification later-Based on guidance value or based on Loan value?.
Dear Rajat,
Go with sale value than the agreed value.
Dear Basavaraj,
I am planning to buy a house for 64 L and the guidance value of the flat is lesser at around 50L. Can I register the property at guidance value? Will the bank have any objection in providing the loan as I have applied loan based on 64L? What is the process of registration if I register property on guidance value?
Dear Rakesh,
You can do so. But ideally, banks will offer the loan on the register value which you are opting and the rules changes from bank to bank. Hence, discuss this at first with your banker. There is no special process to register at the guidance value.
I am planning to buy a villa. Guidance value of land is 31000sq meter. Land Area is 1800 Sq. Feet and it has construction of 2400 sq. feet.
At what amount will the stamp duty and registration value calculated ?
Dear Pooja,
It is either on the guidance value or the sale value (whichever is high).
Thanks Basavaraj. I want to do registration on guidance value. I know guidance value of land but not of the construction done on it. Is construction cost taken as some percentage of the guidance value of plot for registration ?
Thanks and Regards,
Pooja
Dear Pooja,
Yes, you have to include the valuation of the property also to arrive at the total value.
Hi,
I am trying to buy a flat in Banglore urban area, which is approx 10-13 year old.
its guidance value is coming around 47Lacs, considering the fact its 10-13 year old flat, is it legal to buy this property less than guidance value and if yes, how will be the impact on registration and what and all the process involved in further steps.
What should be the asking price considering the age and guidance value?
Dear Arif,
You can buy less than the guidance value also. But the registration cost will be based on the guidance value.
Hi Basavaraj, since the new indexation starts in 2001 now, I need to find out valuation for my plot on 2001 to arrive at the Fair Market Value to calculate my indexed cost of my plot. Do you how can get the past valaution of guidance value?
Dear Ram,
Refer my post "Cost of Inflation Index for FY 2018-19 / AY 2019-20 for Capital Gain" or consult a tax consultant in this regard.
Dear Basavaraj,
Hope you are doing well.
I came to know about your blog today while googling. I read so many threads related to financial planning to real state. All were very nice and well explained.
I am planning to buy a property in Bangalore which comes under panchayat khata and want to buy but problem is that the land owner/builder is not allowing to register more than the guidance value because he will have to pay more tax. I have read your all suggestions/threads to not register below than market value. But I like that plot and want to buy by taking bank loan.
So, whether it creates any problem later apart from the capital gain tax(mentioned in your blog)? Is it possible to take the loan based on agreement value and register on the guidance value ?
One more thing I must say that without loan I can not buy and I have only 30% of the market value.
Thanks,
Goyal
Dear Sumit,
If you are ready to pay more tax because of to benefit the seller, then go ahead. There will not be any other issues. Loan will be sanctioned based on the valuation. Hence, it is hard for me to predict anything.
Dear Basavaraj,
Thank you for your reply.
Actually This plot is very near to the main road compare to others in the same area. That is why I am not worry abt the capital gain tax(But other issues should not be there).
I have some other queries like what are the documents we should ask to the land owner for the verification and what are the documents we need to get from our side before going to hire a lawyer? And please also tell us priority wise like doc A must be provided by the land owner/builder, doc-B we can get it from X source(pls mention source also). If the doc C is not provided by him then we must not go ahead.
Note:- This above query is related to panchayat khata plot.
Thanks,
Goyal
Dear Sumit,
It is better to consult a lawyer regarding document verification.
Pls let me know the guideline value in the year 2001April area HSR layout sector 1,28th main
Dear Raghavendra,
Refer my latest post "Online property guidance valuation calculator in Bangalore – How to check?".
Pl let me know the Bangalore -BSK 2nd Stage
24th main
Guidance value in 2001
Dear Gurudas,
Refer my latest post "Online property guidance valuation calculator in Bangalore – How to check?".
This site gives the guidance value for the current year. But how do I get it for 2001. There is no option there. Please let me know. Thanks.
Dear Shiv,
You have to visit the Sub-Registrar Office of the concerned to get the values of that year.
Dear Mr.Basavaraj,
Good evening !!
I went through your blog in the link https://www.basunivesh.com/2016/07/12/flat-land-and-property-stamps-and-registration-charges/
very informative.
I have bought a flat in whitefield and availed sbi home loan on the market value of the flat. Can I register the property according to guidance value instead of market value ? . Bot SBI and the builder are insisting on market value.
Thanks in advance
Dear Harsha,
It is always better to go for the market (or actual value) value than following guidance value for the sake of saving taxes.
Thanks Mr.Basavaraj