The Stamps and Registration Department might be revising the Guidance values of the properties in the Bangalore Rural and urban Districts between 02-11-2015 to 05-11-2015. It is learnt that a decision has already been taken and will be announced soon.
The New Guidance Values will reflect the latest market values of the properties and there was a section/group, which requested the Govt not to increase the guidance or market values for the registration purpose as the realty sector reeling under severe pressure.
There is an average increase of about 10% to 30% in the property registration values in and around bangalore, coupled with 30% to 40% increase in the municipal taxes will definitely bomb the market and will drag it down to 5 years low in prices.
The prices of properties are not looking up except in the builders advertisements and brochures and the rental market is down by 10% to 40% in the IT belt.
The State Government has increased the Guidance Value or the Circle Rates or the Market Price of the property in Bangalore Urban, Bangalore Rural District and Ramnagar District with 15 days notice to submit the objections, if any, with supporting documents or evidence.
In some areas, the increase is very steep and on an average the increase is around 10% only. The consequent effect will be strain the buyers. With this increase, the Income Tax, VAT, Service TAx and Capital Gains tax will also goes up, indirectly.
The Income Tax department is also scrutinising many transactions, wherein the buyers in collusion with the sellers/agents/builders have underquoted the property consideration below the guidance value. The department may initiate penal action on such buyers and sellers soon. The Guidance Value is treated as the Fair Market Value. The property value or consideration must not be less than the guidance value as per the Finance Act.