BENGALURU: Planning to buy a plot to build your dream home or an apartment to move in? It is better to hurry and complete the process by the end of this August. Chief Minister H D Kumaraswamy’s Rs 43,000 crore farm loan waiver is set to singe property buyers as the state government is likely to revise the property guidance value across the state soon.
The increase could range from 5 per cent to 20 per cent depending on the area concerned. The state government which had not revised the guidance value last year as the reality sector was reeling under the big blow dealt by demonetisation, has now decided to effect a hike in guidance value this year.
“The Kumaraswamy government has been compelled to consider revision of guidance value as it is facing severe resource constraints following the announcement on farm loan waiver,” a source in Revenue department told TNIE.
“The proposal was under consideration for the past couple of months and it has now been decided to go ahead. A formal announcement could come within next few days and the hike could come into force from September month itself,” a senior official in the department of Registration and Stamps told TNIE.
“Revision of property guidance value has been an annual affair in recent years. It was revised in 2013, 2014, 2015 and 2016. It was not revised in 2017 because of the setback realty sector suffered due to demonetisation. The hike was as high as 40 per cent in 2013. The state government is now contemplating a hike of 5 per cent to 20 per cent. The guidance value in well developed urban areas could see the highest hike of 20 per cent and the backward areas could see a rise in guidance value of 5 per cent,”said a sub-registrar in Bengaluru.
The state government has set a target of Rs 10,400 crore from Stamps and Registration for the year 2018-19, which is substantially higher than Rs 9000 crore set for the previous year.
What is guidance value?
Guidance value is the minimum price below which the property cannot be registered. It is prescribed depending on the development of the particular area. Any increase in guidance value increases corresponding property prices and also the Stamp duty and registration fee to be paid for registration of the property.
Realty sector appeals against the proposal
The real estate sector, which is just limping back to recovery after the introduction of the Real Estate Regulator, is unlikely to welcome the move to revise guidance values. “The government must seriously look at revising downward, the guidance values for some areas which have been overpriced since the beginning. Any upward revision will send a negative signal to the real estate sector.
“The committee which looks at these values, in case it is not possible to lower them to encourage industry, must at least leave them unchanged for one more year,” said S Suresh Hari, vice-president,
CREDAI, Bengaluru.