Guidance value of land to go up by 60 pc

Guidance value of land to go up by 60 pc
Deccan Herald

The new guidance value has been calculated on the basis of prevailing market prices.

The guidance value of land in and around Bangalore City will be increased by an average of over 60 per cent with effect from October 14.

Despite this revision, the guidance value will be less than the market value by an average of 43 per cent.

The new guidance value, which has been evolved in the wake of the boom in market prices of land in Bangalore during the last year, will not be uniform throughout the City. Instead, the City has been divided into 3,213 segments with different guidance values, official sources told Deccan Herald.

The revision of the guidance value was undertaken by the Central Valuation Committee headed by the Inspector-General of Stamps and Registration. The previous revision of guidance value in Bangalore had been conducted in August 2004.

Mode of revision

Unlike the previous revisions, the present exercise does not consider the existing guidance value as the base value which is in no way comparable to the actual market rates in the wake of the boom in land prices, the sources said. Instead, the market rate itself was taken as a base for determining the guidance value of land.

The new guidance value was determined by reducing certain percentage of market rate in each of the 3,213 segments of the City based on certain parameters. For example, the new guidance value in Jayanagar has been fixed at 30 per cent less than the market rate, while in Kengeri it is 50 per cent less than the market rate. The committee is said to have opted for the market rate which existed some four-five months ago, as the base value.

The Revenue Department is hopeful of mopping up an additional Rs 500-600 crore per year in the form of registration charges and stamp duty.

There was opposition to the revision from various quarters as over 100 property developers, organisations and general public had filed their objections to the draft guidance value published by the committee in May 27 this year.

The sources maintained that the objections had been analysed in detail and necessary modifications were made in the guidance value. They also argued that there was a dire need to revise the guidance value as the market rate had increased by one-and-a-half to four times since the guidance value was last revised. Besides, this year’s State budget too had indicated revision in guidance value.

The sources noted that a scientific method involving various technical parameters has been followed for the first time in determination of the guidance value by the 17-member Central Valuation Committee, which comprises heads of various government departments, private developers, NGOs and experts.

According to them, the revision exercise has analysed the impact of various factors on land value in Bangalore like Foreign Direct Investment, growth of IT/BT sectors, International Airport, increasing number of educational institutions, students coming from other states, migration of rural population, the salubrious weather condition, scope for growth of the City in all the directions and increasing number of multi-storeyed buildings.

While several official teams conducted the survey of land prices throughout the City and listed them, real estate advertisements in media, auction of BDA sites and prevailing rates of apartments were also considered for determining the new guidance value, the sources said.