Be prepared for some ripples in the realty sector. The
government is planning to hike guidance value by 10-30% across the city in
October first week. Guidance value is the minimum valuation at which properties
must be registered with the government. While this may trigger a rise in
property prices, experts believe it will also regularize the market by cutting
down the black money component in transactions.
For example, a 1,800 sq ft three-bedroom flat in Yelahanka has a price tag of Rs 30 lakh (according to the last guidance value), but its market value is Rs 45 lakh. After revision, the official value would be Rs 35 lakh and the market value Rs 47 lakh since sellers tend to hike prices after every revision in guidance value. So, a buyer has to register his/her flat at Rs 35 lakh and pay the sel ler Rs 2 lakh more.
But some beg to differ. "Guidance value brings more sanity in property values. The revision primarily captures the trends in market transactions to reflect true value. Generally before the revision, buyers rush for registrations to get the benefit and soon after there is a lull. Then the market reconciles to the new values and transactions pick up,'' said Om Ahuja, CEO (residential), Brigade Group.
In November 2014, the hike in guidance value was 20-200% and this year, 10-30% as it is now an annual affair. The revenue department hopes to meet its tar get of Rs 8,200 crore. A senior revenue official said, "Property owners might actually benefit as banks generally give loan going by guidance value."
For example, a 1,800 sq ft three-bedroom flat in Yelahanka has a price tag of Rs 30 lakh (according to the last guidance value), but its market value is Rs 45 lakh. After revision, the official value would be Rs 35 lakh and the market value Rs 47 lakh since sellers tend to hike prices after every revision in guidance value. So, a buyer has to register his/her flat at Rs 35 lakh and pay the sel ler Rs 2 lakh more.
But some beg to differ. "Guidance value brings more sanity in property values. The revision primarily captures the trends in market transactions to reflect true value. Generally before the revision, buyers rush for registrations to get the benefit and soon after there is a lull. Then the market reconciles to the new values and transactions pick up,'' said Om Ahuja, CEO (residential), Brigade Group.
In November 2014, the hike in guidance value was 20-200% and this year, 10-30% as it is now an annual affair. The revenue department hopes to meet its tar get of Rs 8,200 crore. A senior revenue official said, "Property owners might actually benefit as banks generally give loan going by guidance value."
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