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- Thank you
Thanks for sharing the article. Really useful and timely, because now one can see on every media, only builders and agents talking about upward curve, where as ground reality is otherwise.CommentQuote0Flag
- Thanks Arin for your advise. I am looking at Prestige Oasis F type or lot in Swiss town can you approximately tell me the going price at present for these plots
CANOriginally Posted by arin_12THINK, NEGOTIATE, HOLD YOUR PURCHASE
BANGALORE: Bangalore’s realty market has thrown up a queer problem with property prices in peripheral areas falling below the guidance value set
by the government.
While buyers pick up property at prevailing (lower) market rates, they are having to cough up higher stamp duty for registration. This is because stamp duty is calculated on the guidance value set for each area/property.
“There could be strong case for downward revision of guidance value in peripheral areas,” says K R Niranjan, inspector general of registration and commissioner of stamps in Karnataka. Typically, the government conducts a valuation exercise around October every year and issues fresh guidance values based on property price trends.
If prices continue to be south-bound, the state will have to look at aligning the value to prevailing rates and this could well be the first downward revision in Bangalore. Instead of an annual revision, B S Shankaranarayanan, a legal expert in the realty sector, suggests timely and periodic revision of guidance values based on property price movements.
“This will help the public in cases where there is a price decline and enable the government to mop up more when prices go up,” he adds. And, like a builder in the Yelahanka suburb says, this is as good a time as any to bring about a correction in guidance value.
In a particular instance relating to Devanahalli, which witnessed a steep spurt in prices, given its proximity to the new airport, the value was revised during the year, a state government official says.
Requests seeking downward revision have started trickling in with buyers of the Prestige Shantiniketan project in Whitefield and builder ETA (for The Gardens project on Magadi Road) approaching the department.
The guidance value of Prestige Shantiniketan project is 3,200 per sq feet while it is Rs 4,200 per sq feet for ETA and hence, stamp duty would be calculated on these rates. But, realty sources quote the prevailing basic market rate for ETA at Rs 3,400 per sq feet while prices in Whitefield, where Shantiniketan is located, have suffered a very sharp decline of even up to 30%.
Typically, the guidance value is pegged approximately 20% to 40% below market prices to allow for escalation during the year. In the last three revisions, there has only been an upward revision of the guidance value. In fact, in April 2007, the revision was in the range of 100% to 300%, mirroring the realty boom. But, a builder says, the government hiked the rates when the market had already peaked out, marking the beginning of the downward curve.
Much of that has translated into money in the government’s coffers over the last three years when the state collected as much as Rs 3,630 crore in 2007-08. Now, the chief cash cow department is staring at a huge shortfall in collections in 2009-10 compared to a target of Rs 3,300 crore. In 2009-10, the stamp duty collections plunged to Rs 3,100 crore, necessitating a cut stamp duty from 7.5% to 6% to lift buying sentiment.
But, the new dampener seems to be guidance value, which is estimated based on various parameters such as nature of property (site, corner plot, flat and so on), location and specifications of the building complex. The state government valuation committee, which normally takes three months to carry out the exercise, has representatives from the town planning department, BDA, income-tax, city corporation, public works and irrigation department and Institute of Chartered Valuers.
- Hello Can,
Was wondering if you bought the villa in prestige oasis; and would like to share the going rate with us . Thanks:)CommentQuote0Flag