The method of fixing a guidance value for the land and properties needs lot to improve and is against the principle of natural justice.

1. value should not be assessed and fixed by the government, practically it is the buyers/sellers whose are suppossed to assess and fix the price.

for an example Property A at nungambakkam will be assessed by a buyer working at nungambakkam or who has commercial interests there at a higher rate than somebody who works far away from there.

value is supposed to be fixed by the market and not by the govt. It is as absurd as fixing a guidance value for a TV, shares, vegetables or any consumer items.

2. secondly If the government has all the wisdom to fix guidance value they very government should be ready to buy that property at the guidance value instantly (and also pay the seller immediately) if offered buy the property owner at any time.

3. If the govt. is not ready to do that it only puts hurdles against sale/purchase of property.
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  • Guidance Value increase is to prevent transactions in black, which people do because they have illegal source of money or if they cannot afford huge stamp duty. High stamp duty has taken out lot of middle men, brokers, etc.

    Guidance Value is still undervalued in many areas, as it is based on 2007 rate. It is done at a street wise, not area wise. So it is accurate to an extent.

    I support accurate Guidance Value revisions every two years.

    But the stamp duty as to come down. 5% is what it should be.
    Same thing goes for VAT too, it also needs to be lower.

    Govt should make money by taxing empty plots and vacant houses/flats at 2% every year. It will at least prevent hoarding and create a stable RE market with affordable prices and good supply.
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  • If everyone transacts in white,GV will be abolished, If all the vacant plots are purchased through white,Govt will wait for development until it happens. GV is just for guidance n in certain pockets,it is fixed based on previous transaction virtutually.

    Govt is not to guide but existing to fix based on min,max and moving average rate of regn value to collect stamp duty properly
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  • Government can fix a psq.ft rate for registration, guideline value is a misleading term and the market prices in most places are always kept above guideline value because of that. By fixing a p/sq.ft rate for registration, Govt can also encourage people to quote the actual price in the document and Govt will be able to forecast the revenue collections more precisely.
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  • Govt introduced recent GV only after correcting 5 times based on various inputs,representations,realistic market rates data collected from various sources with 8 months of time.
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  • Originally Posted by k11
    Guidance Value increase is to prevent transactions in black, which people do because they have illegal source of money or if they cannot afford huge stamp duty. High stamp duty has taken out lot of middle men, brokers, etc.

    Guidance Value is still undervalued in many areas, as it is based on 2007 rate. It is done at a street wise, not area wise. So it is accurate to an extent.

    I support accurate Guidance Value revisions every two years.

    But the stamp duty as to come down. 5% is what it should be.
    Same thing goes for VAT too, it also needs to be lower.

    Govt should make money by taxing empty plots and vacant houses/flats at 2% every year. It will at least prevent hoarding and create a stable RE market with affordable prices and good supply.

    very well said. exactly my thoughts. we see so many vacant plots lying useless with owners not even bothering to check on them. if people stop hoarding then there will be some respite for prospective buyers.
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  • Hoarding is too harsh a word. RE is one of the modes of long term investment. So not all the vacant plots need be built by the owners and there is no harm, if the owner of a vacant plot waits long term, for his plot to appreciate. This is not hoarding and certainly not speculation. It is comparable with gold, where an investment remains an investment for life.
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  • we are not talking about hoarding . But the way it us purchased n kept to maximize the profit by keeoing GV in standstill mode rather than oscillatting in scintillated way . Supply Demand rule the .....
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  • Well, if vacant plots are not hoarded. We need even higher prices to reduce the demand. So govt should infact raise stamp duty% for plots and guideline value to reflect current market price. They need to reinstate 13% duty back for plots.

    My view is,
    Land is in finite. Supply is less. It is critical to provide housing for residents.
    Gold although supply is less, can be mined and it has less use.
    I am not a socialist, but there is no business for anyone to hold non-agricultural land. This should be discouraged by govt. They should increase property tax for plots. It should not be an investment avenue.
    Empty plots leads for unwanted elements to occupy, which might be wrong but it is hard to blame them as many people cannot afford houses. It is every tempting and easy to set up a hut in an empty plot.
    Plots are also easy to sell to multiple people and many get cheated. If the property is empty, ownership is always a concern.
    At least House construction provides jobs and add value to economy. Importantly it provides cheap rental housing for people.

    People should stop blaming the brokers for price increase. The demand is increasing prices. We, the buyers are increasing prices. Market reduces demand by price increase.

    Nature dictates fittest survive.

    So if you are fitter (wealthier), you will get the plot.
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  • Originally Posted by cruise_1982
    Government can fix a psq.ft rate for registration, guideline value is a misleading term and the market prices in most places are always kept above guideline value because of that. By fixing a p/sq.ft rate for registration, Govt can also encourage people to quote the actual price in the document and Govt will be able to forecast the revenue collections more precisely.


    I know it is easy for forecasting. But it is not fair for someone buying in Poes Garden to pay the same amount as some one buying in Sholinganallur.

    Guidance values is also necessary for property taxes as well.
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  • Originally Posted by k11
    Well, if vacant plots are not hoarded. We need even higher prices to reduce the demand. So govt should infact raise stamp duty% for plots and guideline value to reflect current market price. They need to reinstate 13% duty back for plots.

    My view is,
    Land is in finite. Supply is less. It is critical to provide housing for residents.
    Gold although supply is less, can be mined and it has less use.
    I am not a socialist, but there is no business for anyone to hold non-agricultural land. This should be discouraged by govt. They should increase property tax for plots. It should not be an investment avenue.
    Empty plots leads for unwanted elements to occupy, which might be wrong but it is hard to blame them as many people cannot afford houses. It is every tempting and easy to set up a hut in an empty plot.
    Plots are also easy to sell to multiple people and many get cheated. If the property is empty, ownership is always a concern.
    At least House construction provides jobs and add value to economy. Importantly it provides cheap rental housing for people.

    People should stop blaming the brokers for price increase. The demand is increasing prices. We, the buyers are increasing prices. Market reduces demand by price increase.

    Nature dictates fittest survive.

    So if you are fitter (wealthier), you will get the plot.


    Perfect ! I too feel the same! Most of the absurd pricing in lands nowadays is due to individuals and they should shoulder the blame for this increase as much as developers like VGN who sells plots!

    Some of my acquaintances who bought for 500 Rs psf 5 years back are selling for 2500 odd , which is 500 higher than ongoing there (as per them), and a they say as long as some one is ready to buy, they will not care about "pricing it right". Hmm! Also none of them have the slightest of intentions to build a house for end use! I know one IT guy who sold a ground in Soumya nagar for 65 lacs an year back, to a small builder, who said , in turn he is going to price it higher for his flats . I think ongoing price for flats was 3.5 and they priced it at 4 K.
    So what this does is, it pushes the bar quickly to next level thus making it difficult for someone who want it for end use!

    As Mr.Srinivasan said on Neeya naana, this behavior may also be due to asymmetric information.
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  • There is already a "hoarding tax" for the unproductive land - Wealth tax. Wealth tax is charged at 1% of the GV. How many pay and how good the enforcement is?

    At the very least, if they earmark a portion of it for where it came from, then infrastructure development can take care of itself.
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