BENGALURU: In a New Year gift, the Karnataka government on Saturday reduced the guidance value of immovable properties across the state by 10 per cent for three months from January 1, 2022, which is expected to give a boost to the economy and allow the government to recover the loss in revenue suffered due to the Covid pandemic.
While reviewing the progress of the Department of Stamps and Registration on December 8, 2021, it was found that there was a deficit of Rs 2,021 crore in revenue collection during 2019-20. Taking a cue from the Delhi government’s decision to cut the guidance value by 20 per cent that resulted in a hike in revenue generation, the department had sent a proposal to the government to relax it by 10 per cent. Inspector-General of Registration and Commissioner of Stamps Ravindra PN issued the order on Saturday.
Ravindra PN, who is also the chairman of the Central Valuation Committee for Estimation, however, made it clear that the rule will be effective for three months. The guidance value was updated on January 1, 2019 for properties in Bengaluru Urban, Rural and Ramanagara districts, while it was revised earlier for other districts on December 5, 2018.
Apart from giving a boost to the economy, the decision is also expected to create jobs in the labour-intensive real estate industry.The Confederation of Real Estate Developers’ Association of India (CREDAI) had also submitted a similar proposal to the department when the progress review took place as the market value of properties had crashed.
“We welcome the government’s move as it will largely benefit customers buying properties as they will save 5 per cent of stamp duty against the property value due to 10 per cent reduction in guidance value,” said Suresh Hari, Chairman, CREDAI, Bengaluru Chapter.
How it works out
For a property with an earlier guidance value of Rs 1 lakh and a stamp duty of 5 per cent, the buyer had to pay Rs 5,000. Now, he will have to pay Rs 4,500 as the guidance value will drop to 90,000 due to 10 per cent reduction, saving Rs 500.