BENGALURU: The State government has decided not to increase the guidance value of properties in Bengaluru and the rest of Karnataka at least until the state Budget session.
Guidance value is an indicative market value of a property, and the government would register a sale transaction only at that value or higher. The government's decision comes in the wake of sedate real estate market, and reports that about one lakh flats are lying unsold in Bengaluru.
The government usually revises the guidance value in November and this year, the government has postponed, according to officials sources, by about three months.
The Siddaramaiah government has set a target of Rs 8,200 crore for stamps and registration department for 2015-16, and as of November 19, the department had mobilised Rs 4,910 crore - this is still short of target by about Rs 30 crore.
In 2014-15, the depart ment had collected Rs 7,070 crore in stamps and registration fee as against the target of Rs 7,450 crore. When contacted Inspector tacted Inspector General of Registration and Commissioner of Stamps NV Prasad said the department had proposed a set of revised guidance value, and received a number of comments and objections from the stakeholders. "We are currently looking at those objections. We will take an appropriate decision about them later," he told ET.
The government had, on September 14, issued a set of preliminary notifications, proposing an increase in guidance value in Gandhinagar, Jayanagar, Basavanagudi , Rajajinagar, Shivajinagar, Bengaluru Rural and Ramanagara registration areas. The extent of increase ranged from 10 per cent to 200 per cent in some cases.
Usually , the number of registrations shoot up ahead of guidance value revision, but this year there has not been any unusual spike. The government gets three-fourths of its registration revenues from the Bruhat Bengaluru Mahang ara Palike (BBMP) and Bengaluru Urban district areas.
Basavanagudi MLALA Ravi Subramanya said the guidance value is irrational at several places, and it has hurt the real estate transactions in Bengaluru. "Steep stamp duties coupled with high guidance value have played spoilsport on Bengaluru's property market," he said.
Head of a real estate firm in Bengaluru said the buying sentiment is negative in Bengaluru for the last six months due to macro-economic issues. "Not that people are not buying, but there has not been growth in prices while raw material costs have gone up," he said.