Owners of immovable assets and all those who are planning to buy sites and houses in the coming days, will soon have to shell out more, as the guidance value (also called the government value) of property is set for an upward revision across the State, including Bangalore.
Buoyed with the impressive recovery of the real estate sector after three years of slowdown, the Stamps and Registration department has decided to go in for a revision of the guidance value of properties. Value of land and buildings will be increased depending on the local market value.
Building value is fixed based on materials used for construction. The revision for residential properties is likely to be in the rage of 25 to 50 per cent. Besides the property prices, property tax will also go up with the revision of the guidance value. All urban local bodies, excluding the BBMP, follow capital value system (CVS) to fix the tax amount payable on each property.
Under the CVS, the guidance value (both land and building) is taken into consideration to fix the tax rate. But in the BBMP, unit area value system (UAVS) system is being followed, wherein the city is divided into various zones, and each zone has a fixed rate of tax.
In Bangalore, the guidance value was last revised in 2007. The present guidance value in Bangalore ranges from Rs 1,500 to Rs 15,000 per sq ft. The cost of residential sites was increased by 50 per cent, commercial properties by 60 per cent and industrial properties by 25 per cent. For instance, the guidance value in upmarket Jayanagar was hiked from Rs 1,100 per sq ft to Rs 5,000 per sq ft.
“Presently, there is a huge gap between the market value and the guidance value in major cities, including Bangalore. This anomaly has to be set right by increasing the guidance value. Hence, we have taken up the process. The value will be revised in two to three months,” Commissioner Stamps and Inspector General of Registration S N Jayaram said.
The department has issued directions to all sub-registrars to conduct a survey of the market value of land and propose new rates for the revision. The guidance value will be revised after obtaining the Central Valuation Committee’s nod.
The Commissioner Stamps and Inspector General of Registration is the Chairman of the Committee. Despite the economic slowdown, the property value has shot up in the last three years. For instance, the market value of land in Jayanagar between Rs 8,000 and Rs 10,000 per sq ft. At Vijayanagar, the market value of land is in the range of Rs 5,000 to Rs 6,000 per sq ft, while the guidance value is between Rs 2,500 and Rs 3,000 per sq ft.
The Government is expecting a big jump in revenue from stamps and registration after the revision of the guidance value in Bangalore urban and Bangalore rural districts. These two districts contribute 50 per cent of the total revenue, sources said.
Going North
* Govt to soon increase guidance value of landed properties
* Cost of residential properties may go up from 25% to 50%
* Revision in guidance value to trigger increase in property tax
* Last revision was done in 2007