Guidance value cut not just yet, says top registrar

Guidance value cut not just yet, says top registrar



Raghavendra R First Published : 09 Mar 2009 07:47:35 AM ISTLast Updated : 09 Mar 2009 09:33:00 AM IST
BANGALORE: The sales and transfers of immovable properties have witnessed a downward trend in the wake of the global economic meltdown. However, the speculation concerning the reduction in the guidance value to revive construction industry still remains a distant dream for the prospective buyers. A section of the press had on Sunday reported that guidance value was set to come down by 25 per cent. Speaking to Express, Inspector General of Registration & Commissioner of Stamps K R Niranjan ruled out any reduction in guidance value of properties in the near future. “There is no such proposal before the government,” he informed.
However, he maintained that the revision of guidance value will be considered if the realty market crashes further in the coming days. “We are observing the market very closely and steps will be taken to reduce the guidance value if the situation worsens,” he added.
Niranjan said that the government had already taken measures to boost the realty sector. “To encourage prospective home buyers, stamp duty will be reduced to six per cent from the existing 7.5 per cent as announced in the state budget. The new rate will come into effect from April 1,” he said. The guidance value is already fixed 30 to 40 per cent less than the market value on the properties, Niranjan added. “Come April, one can save around 1.75 per cent on stamp duty that includes 1.5 per cent stamp duty reduction along with additional stamp duty cut and infrastructure cess cut,” he said.
In view of the substantial reduction of stamp duty, there is likely to be a shortfall of Rs 400 crore in revenues during 2009-10. In 2007-08 as against annual target of Rs 3,812.55 crore, Rs 3,630.73 crore was collected by the Department of Stamps and Registration. In 2008-09, Rs 2,757.97 crore has been collected with 8,70,578 documents being registered, till January 2009.
The annual revenue target for 2009-10 is Rs 3,300 crore and Inspector General of Registration & Commissioner of Stamps is positive in achieving the target due to the steps taken by the department.
Federation of Karnataka Chambers of Commerce and Industry President D Muralidhar said that it doesn’t help by just cutting the stamp duty at a time when real estate market is seeing a downturn for the past one year. “Stamp duty cut is as per the recommendations by the Central government and this alone doesn’t boost the market,” he added.
Muralidhar opined that the guidance value should be revised to the present market value when there is downturn in the market.