The ongoing pandemic has been a cause of great concern for people in the real estate business. While there is no dearth of properties for sale; buyers are few, and far apart. In a move that is sure to cheer them up, the Karnataka state government has announced a review of property guidance values in Bangalore and align it to market rates.
What Is The Guidance Value?
The Guidance Value refers to the minimum value for all property transactions. The system was first introduced I Karnataka in the 1990s. This is published by the state’s Dept. of Stamps & Registration. The value is based on locality and individual projects/ buildings.
Well developed locations have a higher guidance value while under-developed places have a lower guidance value. The guidance value affects property prices and is a major source of state revenue. Registration value for a property cannot fall below the guidance value.
If the property is bought at a price lower than the guidance value, it must be registered at the guidance value, not the value at which it was bought.
How To Calculate The Guidance Value Of Property In Bangalore?
- Visit the KAVERI website
- Choose between the Basic Search and Advanced Search
- Select your district from the drop-down menu
- Enter the first three characters of the area the property is located in in the ‘Area Name’ box.
- The system will list out results to match the input.
- Select the correct area and choose property usage types, total area and measurement units
- In the Advanced search section, you will also have to enter the SRO Office and Registration District.
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Why Is The Government Changing Guidance Value In Bangalore
The last update to guidance values was made in January 2019 wherein the guidance value was increased by 5% to 25%. Over the past few years, the government has realized that many people buying and selling property have been doing so by using a General Power of Attorney and special agreements that enable them to avoid paying registration fees and stamp duties.
Also, in many cases, the guidance value of a vacant plot was much higher than its actual cost. As a result, the state has been losing out on revenue.
By aligning guidance values with market rates, people will no longer fear to have to register the property at a higher rate than their transaction, and hence state revenues should increase in proportion to the number of properties being sold.