BENGALURU: The real estate assets in Bengaluru and elsewhere in Karnataka will cost more from April 1 onwards with Chief Minister Siddaramaiah giving his nod to an increase in the guidance value of properties.
Guidance value is an indicative market value of a property, and the government would register a sale transaction only at that value or higher.
“The increase in guidance value ranges between 10% and 30%. There are also places where guidance value has gone up only 5%, and in some place it has not moved at all,” Inspector General of Registration & Commissioner for Stamps Dr.N.V.Prasad told media. “The last revision happened in December 2014, and the revision is usually adjusted to inflation,” he added.
The realty sector, however, has urged the government to withdraw the revision on the grounds that the volume of transactions has already dropped, and this step will make homes unaffordable for buyers. “The government is already collecting a VAT on flats sold, and this kind of frequent revisions will only make our products more expensive, while the supposed aim of the government is to cut the transaction costs,” Credai Bengaluru President J.C.Sharma told ET. “Already in many places, the guidance value is higher than the market value. The government reconsider this revision,” Sharma, also the Vice Chairman at Sobha Developers, said.
The government had, on September 14, last year issued a set of preliminary notifications, proposing an increase in guidance value in Gandhinagar, Jayanagar, Basavanagudi, Rajajinagar, Shivajinagar, Bengaluru Rural and Ramanagara registration areas. The extent of increase ranged from 10 % to 200 % in some cases. Usually, the number of registrations shoot up ahead of guidance value revision, but this year there has not been any unusual spike. The government gets three-fourths of its registration revenues from the Bruhat Bengaluru Mahangara Palike (BBMP) and Bengaluru Urban district.
The government usually revises the guidance value in November, and last year, the government postponed by about five months. The Siddaramaiah government has set a target of Rs 8200 crore for stamps and registration department for 2015-16, and the department is hopeful of meeting the target over the next 20 days.
Credits ET Realty