The Karnataka government plans to hike the property guidance value for the real estate sector by about 10-30 percent, sources in the Department of Stamps and Registration said. Guidance value is the minimum value at which the sale of a property can be registered with the state government. It is also known as the circle rate in some states.
This will be the first time the state is considering a hike in the guidance values since the last hike of 25 percent in 2018-19. Previously, the government had offered a rebate of 10 percent until July 2022 on account of Covid-19.
According to the data provided by the department, it collected Rs 17,874 crores against the target of Rs 17,000 crores in the last financial year in revenue from stamps and registration. In April 2023, the department collected about Rs 1,000 crore. Experts say though this will have a minimal immediate effect on homebuyers, a drastic increase may pinch affordability 1-2 years from now.
Experts say an immediate hike in guidance value will start hurting affordability about 1-2 years down the line. Additionally, the micro demographics of the difference in the guidance value and market value should also be considered. In most prime locations, or CBD areas, the difference is about 40-50 percent while in the outskirts, it's about 30 percent, local brokers add.
