As the name suggests, guidance value is an indicative figure laid post the government’s assessment of the real estate value in the region concerned. The guidance value forms the basis of assessing the stamp duty and annual property tax to be levied on an asset. Consequently, transactions will attract a higher stamp duty and registration charge. Registration of property is among the top three revenue generators for the State, and the government is keen to tap this.
While the central valuation committee has been continuously working to bridge the gap between the market value and the guidance value and incorporate a uniform stamp duty structure, this move has been made in a sluggish quarter.
Commercial real estate hasn’t fully recovered from the impact of the global meltdown and increase in stamp duty at this point in time will not provide much assistance to the market.
As per the proposed revision, the guidance value of property will see a hike in the range of 15%- 26% and is set to be operational by November 2014 unless contained by public objection.
RCC buildingsThe government has also revised the rates for the sale of different types of buildings, which will add up to the revised guidance value. The new guidance value of the ground floor of RCC buildings has been increased from Rs. 1,300/sq. ft to Rs. 1,600 and subsequently the building value augmented from Rs. 80 to Rs. 300/sq. ft based on the type of material used in the structure.
The new government has not revised the guidance value for apartments in the city. This is anticipated to speed up the registration process and expected to fuel purchases during the ongoing festive season.
