Bengaluru: The State government in an effort to stabilize the real estate market of Karnataka and Bangalore has decided not to increase the guidance value of the properties for the whole of Karnataka including Bengaluru as well. Guidance value is important for any property transaction from the individual’s stand point. The reason is the stamp duty and the registration with the government would only happen at that price no matter what price the property is sold at. The decision is being taken probably to churn up the real estate market of the urban areas and especially Bangalore. This decision of the government comes at a time when the real estate market is in a lull with a huge back log of unsold inventory lying in Bangalore. It is a norm that the government revises the guidance value every November and in the year 2015 the government has been witnessed to postpone it by about three months or more. The decision was that the government would keep the revision of the guidance value in abeyance till the next state budget session.
The state government led by Mr. Siddaramaiah had earlier set a target for the government exchequer of Rs. 8,200 crores from the stamps and registration department for the financial year 2015-16. At the end of the month of November 2015 the amount mobilized by the land registration department is Rs. 4,910 crores which is still short of the set target by about a sum of Rs. 30 crore. The government data revealed that the department had collected Rs. 7, 070 crore as against the set target of Rs. 7, 450 crore. Mr. N V Prasad, the Inspector General of Registration and the Commissioner of Stamps said that the department earlier proposed a revision of the guidance values but received varied comments and objections too from the different stakeholders. The department is currently engaged in handling and investigating these objections after which an appropriate decision will be taken.
The department of land registration issued preliminary notifications with the proposed increment of the guidance value in places like Jayanagar, Rajajinagar, Gandhinagar, Shivajinagar, Bangalore Rural and Ramnagara registration areas. The proposed increment of the guidance value ranged from 10 percent to 200 percent in few of the cases. The sources from the government opine that there have been objections from few of the stakeholders which the department is looking in to. The department officials noted that the usual registration shoots up just before the time of the revision of the guidance value to avoid the payment of the extra stamp duty. But this year it did not which is not a good indicator due to which the government kept the revision of the guidance value in abeyance. The government exchequer receives three fourths of the registration fees from the BBMP (Bruhat Bengaluru Mahanagara Palike) and the different urban districts of Bengaluru.
There is a section in the political circles who are of the opinion that the buying sentiments have gone down as noticed in the last six months due to the different macro-economic issues and varied market factors. Along with that they opine that in many places the guidance values are not rational due to which it is affecting the real estate transactions in Bangalore too.
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