Bengaluru: In a New Year gift, the Karnataka Government yesterday reduced the guidance value of immovable properties across the State by 10 percent for three months from January 1, 2022.
Revenue Minister R. Ashoka said the State Government has reduced the guidance value for the purchase of property, whether it is revenue land, site, building, or a flat, by 10 percent, which would be applicable across Karnataka up to March 31, 2022.
This is an offer for those who are pushing time with a General Power of Attorney (GPA) and agreements on properties. Also, it is for those who are planning for property registration. “This will be effective from January 1 to March 31,” the Minister said.
The Minister said the 10 percent cut in guidance value would also help people who had been impacted by the COVID-19 pandemic for the last 20 months. He urged people who had purchased property to use this opportunity to register them.
The guidance value is the minimum selling price of a property fixed by the government, depending on the locality and type of structure.
The 10 percent cut would be applicable across Karnataka for all kinds of property registration, whether it is dry or irrigated land, flat or site. It would be applicable to all and this may have some impact on the revenue to the Government but would also benefit common people.
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 percent.
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.
How it works
For a property with an earlier guidance value of Rs. 1 lakh and a stamp duty of 5 percent, 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 percent reduction, saving Rs. 500.