BANGALORE: Anticipations are circulating within the real estate community in Bangalore, suggesting that the Karnataka government is poised to implement a substantial 30% increase in the real estate guidance value effective from October 1. It is rumored that an official guidance value table model will soon be unveiled, allowing the public to provide input before the final rates are formally established for the October 1 implementation.

This adjustment is expected to bolster the state government's property registration revenue for a six-month period, concluding in March 2024. The guidance value, serving as the baseline valuation for all land transactions, ensures that no property can be registered at a rate lower than this benchmark. This measure effectively curbs the possibility of underreporting property values and curtails the generation of unaccounted or "black" money.

The primary motivation behind this proposed guidance value hike appears to be the Karnataka government's pursuit of additional revenue, aligning with its commitment to fulfill the "five guarantees" pledged ahead of the 2023 Karnataka assembly elections. Chief Minister Siddaramaiah, who also holds the role of Karnataka's finance minister, had already hinted at this guidance value increase during his budget speech in July.

A topic of potential contention could revolve around reports suggesting a uniform rate of increase in guidance values. If the current rumors hold true, the government is inclined towards a consistent and flat rate of increase in guidance values. Such a uniform increment would apply uniformly, regardless of the demand variations across different regions or areas.

Data indicates that this 30% guidance value hike would mark the most significant adjustment since 2013, when a similar percentage increase was implemented. Notably, there were no changes to guidance values in 2015, 2017, and 2020. In 2021 and 2022, the guidance value saw more modest 10% increments.

This impending rise in guidance values is likely to result in increased costs for new apartments and properties, particularly affecting individuals interested in purchasing residential real estate in Bengaluru. It's worth noting that Bangalore contributes to approximately 60% of all property registrations in the state.

RBI Ends Incremental Cash Reserve Ratio for Banks, Phases Out Funds

G20 Summit's Finance Track: Navigating Global Economic Challenges