Tuesday, October 28, 2014

#Karnataka Govt's decision to hike guidance value is uncalled for says CREDAI #Bangalore

Property prices in Bangalore ia likely to go up with the State government proposing an upward revision in the guidance value of immovable properties.

The Inspector General of Stamps and Registration has notified the draft guidance value on October 7 and has given 15 days’ time for the public to file objections, if any. The details of the revised guidance value has been hosted on its website https://www.karnataka.gov.in/karigr

Response from Mr Suresh Hari, Secretary, CREDAI  Bangalore,

“We have been advocating a scientific approach to calculating the guidance value. Normally, the thumb rule is guidance value is calculated at 70 per cent of the market value. There are some anamolies in this calculation itself. It creates an artificial bubble, and hence an inflationary trend exists in real estate market. Guidance rate does not take into account price correction at any time. As a result of the inflationary trend and also a higher stamp duty charges, buyers do not come forward to register. 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 properties in time as their costs are down. Stamp duty should be in relevance to the service given If stamp duty is reasonable then multiple transactions will also be possible.

“Another reform which is critical is de-linking registration charges to property values. Registration fees are normally charged for documentation, which is the same across property types, values and sizes. Then why should registration fees be calculated as a percentage of property value,”

Reponse from Mr.Viswa Prathap Desu, Vice President, Sales and Marketing, Brigade Group

“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”.