Karnataka government proposes to slash guidance value of properties

08 Sep 2021 CW Team

Last week, revenue minister R Ashoka said that the government was considering revising the guidance value by December and that any reduction would be implemented across Karnataka, with the exception of industrial zones and highway rest areas.

The minimum selling price of a property is known as the guidance value. It is determined by the government based on the location and type of structure. Property prices will fall as a result of a downward revision.

The government is required by law to revise the value every year. It announced a hike in the range of 5% to 24% in January 2019.

KP Mohanraj, inspector general of registration and commissioner of stamps, told the media that because of the pandemic, the guidance value could not be changed in 2020. They've started the process because the government wants to take it up this year.

There have long been calls to lower interest rates, which are extremely high in some areas and drive up property prices. A property on MG Road, for example, is estimated to be worth more than Rs 1.9 lakh per square metre. It costs Rs 2 lakh per sq m on Lavelle Road.

According to real estate industry representatives, certain properties are being undervalued and sold as a result of the Covid-related slowdown.

If the guidance value is reduced, it will have an impact on property tax.

Lower guidance values are expected to increase the number of property registrations, resulting in increased revenue for the government. More than 2.1 lakh documents were registered in August, bringing in Rs 1,142 crore in revenue, compared to Rs 969 crore or 1.7 lakh documents in 2020 and Rs 911 crore or 1.7 lakh documents in 2019.

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Also read: Navi Mumbai municipal corp identifies 119 properties for tax dues

Developers and would-be homebuyers have been encouraged by discussions in the state government about lowering the guidance value of properties, providing additional momentum to the real estate sector, which is showing signs of recovery following the second wave of Covid-19. Last week, revenue minister R Ashoka said that the government was considering revising the guidance value by December and that any reduction would be implemented across Karnataka, with the exception of industrial zones and highway rest areas. The minimum selling price of a property is known as the guidance value. It is determined by the government based on the location and type of structure. Property prices will fall as a result of a downward revision. The government is required by law to revise the value every year. It announced a hike in the range of 5% to 24% in January 2019. KP Mohanraj, inspector general of registration and commissioner of stamps, told the media that because of the pandemic, the guidance value could not be changed in 2020. They've started the process because the government wants to take it up this year. There have long been calls to lower interest rates, which are extremely high in some areas and drive up property prices. A property on MG Road, for example, is estimated to be worth more than Rs 1.9 lakh per square metre. It costs Rs 2 lakh per sq m on Lavelle Road. According to real estate industry representatives, certain properties are being undervalued and sold as a result of the Covid-related slowdown. If the guidance value is reduced, it will have an impact on property tax. Lower guidance values are expected to increase the number of property registrations, resulting in increased revenue for the government. More than 2.1 lakh documents were registered in August, bringing in Rs 1,142 crore in revenue, compared to Rs 969 crore or 1.7 lakh documents in 2020 and Rs 911 crore or 1.7 lakh documents in 2019. Image Source Also read: Navi Mumbai municipal corp identifies 119 properties for tax dues