We have been advocating a scientific approach to calculating the guidance value. Normally guidance value is calculated at 70 per cent of the market value.
There are some anomalies in this calculation itself. It creates an artificial bubble, and hence an inflationary trend exists in the real estate market. Guidance rate does not take into account price correction at any time.
As a result of the inflationary trend and the higher stamp duty charges, buyers do not come forward to register.
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What is desirable with increasing guidance value is bringing down stamp duty, which is currently at 5 per cent of property value, to 1-2 per cent.
This will encourage buyers to register property in time as their costs are down. Stamp duty should be in relevance to the service given; if it is reasonable then multiple transactions will also be possible.
“Another reform which is critical is de-linking registration charges to property values. Registration fee is normally charged for documentation, which is the same across property types, values and sizes. Then why should registration fee be calculated as a percentage of property value?
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Suresh Hari, Secretary, CREDAI-Bangalore
‘Not the right time’
This revision is uncalled for. The market is still recovering from last year’s sluggish growth. We thought the new government would offer some solace, but it’s only coming up with a deterrent.
Viswa Prathap Desu, Vice-President, Sales and Marketing, Brigade Group