Just after two years, Karnataka Govt. moots 5 to 25% hike in Guidance Value
Bengaluru/Mysuru: Buying your dream home may, in all likelihood, become more expensive as property rates in Mysuru will see an upward trend. The State Government is all set to hike the guidance value by 5% to 25%.
According to Government sources, the guidance value will be increased tentatively from Dec. 26, to give a fillip to the real estate sector which has seen a slump in recent times. The hike in guidance value will bring in cheer among those who want to sell their properties and Statewide, Mysuru and Mangaluru will see the steepest hike of 15 to 25 percent, sources said.
Earlier, the stamp duty rates were revised once a year but a slowdown in the real estate market had compelled the government to defer it, sources said. With the revision of guidance value, the government hopes to raise revenue of Rs. 1,000 crore or more.
Guidance value is the price of a property fixed by the government, and property registrations cannot go below that fixed price. This is also a major revenue source for the government. The rates have remained unchanged in State since 2016 owing to a sharp decline in the real estate sector.
As per the Stamps and Registration Act, the guidance value has to be revised every year. However, the revision was postponed this time due to the Assembly elections held earlier this year.
Following reform measures like demonetisation and the introduction of Real Estate Regulation Act, the real estate sector had seen a downward trend. Only now, since 2016, the market is showing signs of revival and the government move is set to boost the sector, sources said.
The proposed hike will mean an increase in stamp duty rates, which the buyer has to pay while buying or leasing properties and also premiums charged on Floor Space Index and other property-related payments.
Speaking to Star of Mysore, officials from Mysuru Urban Development Authority and Sub-Registrar’s Office said that so far they have got no official communication from the government regarding the increase in guidance value. However, they said that Mysuru’s real estate sector will see a boom once the guidance value is hiked.
There are many plots, ready-to-move-in houses and built-up houses. There will be a demand for them once the guidance value is hiked. The government wants guidance value to be in sync with market rates, officials said.
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Not sure how it will bring cheer to property sellers. It is good for Govt and bad for people who cheat on stamp-duty/income-tax by showing least possible price, who are in majority. For honest sellers/buyers it does not make any difference as market value is much higher than guidance value.
The real estate transactions have gone down since couple of years. There are either few or no buyers in the market. I wonder how the market will revive with the increase of guidance value. Only an idiot can buy this idea.