Revised guidance value: Land rates to speed up by 50%
Laying hands on a sprawling enclave in one of the modish areas in Bangalore, is likely to take a toll on the bank account of a home buyer, due to the revision of the guidance value, with effect from August 12 2013. The good news is, the Revised Guidance Value is expected to mop up additional revenue of Rs 840 crore for the government in the present year.
Au courant system, a new set of rules for guidance value will come into play for the evaluation of Gated Communities and apartments, as an attempt to shore up the revenue collection process.
Analysis of the new Guidance Value
The revision is designed depending on the construction type, facilities offered and the strategic position of the apartments, Gated Communities and Villas. By putting into practise the Geographical Information System, the areas which have experienced an old hand in terms of growth of number of apartments, have been severely influenced by the new guidance value.
In accordance to the new market based guidance value, the land cost has rolled out by 30%-50% in 9 out of 10 parts of the city, while the remaining areas have been affected by a 100% increase in land prices. For instance, UB Towers stationed at Vittal Mallya Road have been pegged in the range Rs 20150- Rs 20350 per sq ft, and is considered to be the most high-priced property in the city while the properties on Bangalore outskirts cost around 1% of that.
The revision has given birth to the lowest value per sq ft of property in the city at Rs 250 and the highest being at Rs 20350. The sole purpose of the revision is to spike the government revenue earning process and contribute towards a cash flow of Rs 1500 crore. In a move that bodes well with the revised policy, the new guidance value will also include the registration of villas and houses in gated communities (for the first time), that measures between Rs 500-Rs 1000 per sq ft.
Area wise revision
Two years ago, the guidance value for areas in central business districts of the city (namely Brigade Road, M.G. Road, Commercial Street and Kasturba Road) have climbed the ladder to Rs 15200 per sq ft from 10000 per sq ft.
Certain commercial and residential properties near the northwest suburbs, at a distance of 40 Km from the city and the suburbs in the southwest of the city adjacent to Mysore have experienced a high rise in the demand for flats, villas, commercial shops, private offices and malls. Hence, the guidance value for such regions has climbed a few notches up.
Under the new system, villas and duplex houses in the south-eastern parts of the city have a guidance value ranging between Rs 500- Rs 1000 per sq ft. The farmlands on the outskirts of the city under the new policy will be pegged at Rs 7 crore- Rs 9.9 crore per acre.
The new policy is aimed to accelerate the revenue collection and curb the growth of black money in property transactions. The revised guidance value is expected to give the government a push to reach the stupendous revenue target of Rs 6500 crore in the fiscal year. However, the lower and mid-income buyers will be greatly discouraged from property transactions.
