Table of Contents
- Are guidance and guideline values the same?
- Basic facts about guidance value
- How to calculate guidance value of property in Bengaluru?
- Latest developments in Bengaluru on guidance value
- How does lower guidance value benefit?
- Guidance value of park-facing properties
- Guidance value of road-facing properties
- Guidance value of higher-floors, amenities, developed locales
- Current guidance value in Bengaluru
- Guidance value of agricultural land on per acre basis
- Guidance value in prime areas
- Registration offices in Bengaluru-Urban (zone-wise)
- Registration offices in Bengaluru-Rural (zone-wise)
- Quick recap
The minimum value at which a property can be registered is its guidance value. In other words, it is the Ready Reckoner value of the property. The Department of Stamps and Registration of every state publishes the guidance value of the property, and this varies from locality to locality. It also differs from one building to another. While the guidance value is among the largest source of revenue for the state, any increase or any decrease in value can have a direct impact on the cost of the property. The stamps and registration department revises the value from time to time and much study goes into keeping the rates as close as possible to the market value of properties so as to avoid any instances of black money and cash transactions that can affect the revenue.
In a proposed decision to be applicable from FY 2021-2022, the Urban Development Department has directed the BBMP to adopt the ‘guidance value’ method instead of the ‘unit area value’ method, to calculate property taxes. However, it is expected that the adoption of the new method may be postponed till the economy stabilises.
Are guidance and guideline values the same?
The terms guidance value or guideline value are used interchangeably and refer to the same value. Different states may use one or the other. People may usually search for one or the other term, depending on which state they belong to. Other names by which people usually identify guidance value, include ‘Ready Reckoner rate’ or RR rate, which is widely used in states like Maharashtra and ‘Circle Rate’, which is a term often used in Delhi, Noida, etc
Basic facts about guidance value
- Guidance value or guideline value is like a fixed price of the property. It cannot go below this value.
- If you buy a property below the guidance value, you will still need to register it at the guidance value.
- If the sale of the property has happened at a higher value than the guidance value, registration takes place as per the higher value.
- Different states use different terms for guidance value such as Ready Reckoner rates or circle rate.
- A well-developed and established locality may have a higher guidance value. The same value will be lower in areas that are early-on in the development cycle. Similarly, agricultural land will have
- Guidance or guideline value is applicable on apartments as well as plotted developments.
- Note that guidance value is just a benchmark. A home buyer cannot persuade the property seller to sell at the guidance value.
Now that you are familiar with the term, let us see how such values are calculated. Let’s take the example of Bengaluru.
How to calculate guidance value of property in Bengaluru?
Step 1: Visit the Kaveri website at kaverionline.karnataka.gov.in
Step 2: Opt for basic or advanced search.
Step 3: Type in details of district, area name, property usage type, property type, total area and measurement. Other fields will be auto-populated and you will be shown a valuation of the building rate.
Step 4: Other details that you may want to enter are about the construction type, annexure rules, parking type etc. This will throw up a total valuation of the property.
If you are opting for an ‘advanced search’, you will have to enter extra information pertaining to the registration district and the SRO Office.
Explainer: How does guidance value work?
Jairaj Reddy decides to buy a property with a market value of Rs 6,500 per sq ft. The guidance value in that area is Rs 5,000 per sq ft. Home buyers can register the property at a rate between Rs 5,000-6,500 per sq ft.
Now, suppose it was the other way around. That is, if the property was at the selling price of Rs 5,000 per sq ft but the guidance value was Rs 6,500 per sq ft, Reddy would still have to register it at Rs 6,500 per sq ft, because it is the minimum value.
Latest developments in Bengaluru on guidance value
No hike in guidance value in 2020
In 2019, the Karnataka government had hiked guidance value in the range of 5-25 per cent. This year the authorities have confirmed that there will be no further hike till 2021. Usually the new guideline values come into force from January 1 every year, but going by the derailed momentum in the sector, the authorities have decided not to put added pressure on home buyers. The authorities also claim that their revenue has significantly increased encouraging them to take such a friendly decision.
Property prices, tax hike and guidance value
With the Karnataka state government proposing to hike the property tax across corporations, property prices may increase. The cabinet approved a proposal to amend the Karnataka Municipal Corporation Act, 1976, to tweak property taxes.
Currently, residential and non-commercial buildings are taxed between 0.3% and 1% of the guidance value. The amendment may change it to 0.5% and 1.5%. So far, 50% of the guidance value of the property is considered as capital value for tax calculation and it will be changed to 25% of the guidance value. Vacant sites over 1,000 sq ft may also be brought into this fold.
Undervaluation of property causes loss of over Rs 400 crores
Both, home owners and real estate developers, have been undervaluing the property. However, this always has a negative effect. In Bengaluru, such undervaluation and discrepancies have cost the state a loss of lakhs of crores. Underestimation of properties was seen in 13,533 sites and the total underestimation was of about Rs 3,167 crore from which a revenue of Rs 190 crore was expected.
How does lower guidance value benefit?
Both, home buyers and sellers, can benefit if guidance or guideline value is lower. Buyers can benefit because it means relatively cheaper property and less stamp duty and registration charges. For a seller this means lower capital gains tax.
Guidance value of park-facing properties
The revised guidelines in 2019 enabled an additional 10% rise in Guidance Value for properties facing parks.
Guidance value of road-facing properties
Guidance Value of properties facing roads have increased by 25% as compared to values in 2017. There will be no further hike in 2020.
Guidance value of higher-floors, amenities, developed locales
Guidance value is higher for properties starting from the sixth floor. Similarly, amenities that a project provides are also classified by the state. If you are provided with over five categories of lifestyle amenities (swimming pool, sports courts etc) you will be paying a higher value.
Luxury locales also have a higher guidance value.
Current guidance value in Bengaluru
|AREA||RATES (PER SQ MT)|
|VANI VILAS MARKET TO D. BANUMALAH CIRCLE ON SAYYAJI RAO ROAD||RS 32,000|
|BANUMALAH CIRCLE TO K.R. CIRCLE||RS 68,200|
|K.R. CIRCLE TO AYURVEDA HOSPITAL CIRCLE||RS 1.15 LAKH|
|AYURVEDA HOSPITAL TO RMC CIRCLE||RS 49,100|
|RMC CIRCLE TO HIGHWAY CIRCLE||RS 32,600|
|KUMBARAKOPPAL MAIN ROAD||RS.1,29,000|
|KUMBARAKOPPAL CROSS ROADS||RS 9,600|
|KUMBARAKOPPAL INNER CROSS ROADS||RS 9,900|
|KUMBARAKOPPAL COLONY||RS 6,500|
|KUMBARAKOPPAL SOUTH SIDE||RS 13,000|
|GOKULAM MAIN ROAD||RS 38,400|
|GOKULAM CROSS ROAD||RS 19,800|
|GOKULAM IST & 2ND STAGE||RS 25,000|
|GOKULAM 3RD STAGE||RS 28,000|
|GOKULAM 4TH STAGE||RS 20,000|
|CONTOUR ROAD EWS||RS 19,700|
|KARNATAKA SLUM DEVELOPMENT BOARD HOUSES||RS 8,600|
|BOGADI 1ST & 2ND STAGE||RS 28,000|
|SRIRAMPURA 1ST STAGE||RS 23,000|
|SRIRAMPURA 2ND STAGE||RS 24,000|
|METAGALLI MAIN ROAD||RS 18,300|
|HALE OORU||RS 8,500|
|AMBEDKAR COLONY||RS 3,500|
|B.M SRI NAGAR MAIN ROAD||RS 10,100|
|B.M SRI NAGAR CROSS ROAD||RS 8,300|
Guidance value of agricultural land on per acre basis
|AGRICULTURE LAND (KUSHKI) AT AJJAYYANAHUNDI||RS 51 LAKH/ACRE|
|THARI LAND AT AJJAYYANAHUNDI||RS 53 LAKH/ACRE|
|HOUSE SITES AT AJJAYYANAHUNDI||RS 4,750/SQ.MT|
|HOUSE SITES APPROVED BY THE DEVELOPMENT AUTHORITY||RS 10,900/SQ.MT|
|AGRICULTURAL LAND (KUSHKI) AT CHOWDAHALLI||RS 30 LAKH/PER ACRE|
|AGRICULTURAL LAND AT AYARAHALLI||RS 8.5 LAKH/ACRE|
|THARI LAND AT AYARAHALLI||RS 9 LAKH/ACRE|
|GOVT UTHANAHALLI (MUDA LIMITS)||RS 32 LAKH/ACRE|
|INAM UTHANAHALLI||RS 8 LAKH/ACRE|
|AMCHAWADI VILLAGE IN YELWAL HOBLI||RS 3.50 LAKH/ACRE|
|ANANDUR||RS 20 LAKH/ACRE|
|YELWAL HOBLI MUDA LIMITS, MYSURU-HUNSUR ROAD||RS 35 LAKH/ACRE|
|ANAGANAHALLI UNDER MYSURU WEST OFFICE LIMITS||RS 8 LAKH/ACRE|
|ARASINAKERE||RS 5 LAKH/ACRE|
|UDBUR (MUDA LIMITS)||RS 22 LAKH/ACRE|
|KADAKOLA||RS 35 LAKH/ACRE|
Guidance value in prime areas
|CUNNINGHAM ROAD (CHANDRIKA HOTEL TO BALEKUNDRI CIRCLE)||RS 2,78,600|
|LAVELLE ROAD||RS 2,07,900|
|M.G.ROAD, BRIGADE ROAD, RESIDENCY ROAD||RS 1,95,500|
|12TH MAIN, HAL 2ND STAGE||RS 1,11,800|
|DEFENSE COLONY, INDIRANAGAR||RS 1,71,800|
|CMH ROAD, 1ST TO 12TH CROSS||RS 1,43,200|
|9TH MAIN, JAYANAGAR||RS 3,87,500|
|DOLLARS COLONY, RMV 2ND STAGE||RS 1,84,000|
|SAMPIGE ROAD, MALLESHWARAM||RS 2,05,000|
|SADASHIVANAGAR (C.V. RAMAN AVENUE TO BHASHYAM CIRCLE)||RS 2,58,200|
|SANKEY TANK ROAD||RS 2,70,000|
|DR. RAJKUMAR ROAD||RS 1,61,500|
|ESI HOSPITAL ROAD, RAJAJINAGAR||RS 1,10,000|
|NANDIDURGA ROAD||RS 1,75,000|
|BANNERGHATTA MAIN ROAD (HOSUR ROAD TO DAIRY CIRCLE)||RS 1,53,000|
|VITTAL MALLYA ROAD||RS 2,08,900|
Registration offices in Bengaluru-Urban (zone-wise)
|Bengaluru east||Bengaluru west||Bengaluru north||Bengaluru south|
|Indiranagar, BDA Complex, Bangalore 560050.,|
|No.488 B-Block, Karnataka Industrial Area Development Board Building, 14th cross 4th Phase, Peenya 2nd Stage, Bangalore 560058.|
|Sree Rundhreswara Chambers, Yelahanka New Town, Bangalore 560064.|
|SLN complex, Near RTS Bus Stand, Mysore Road, Kengeri, Bangalore 560060.|
|Domlur, BDA Complex, Bangalore 560038.,|
|Sri Rameshwara Temple Commercial Complex, Near Kannada Sahithya Parishat, IIIrd Main Road, Chamarajpet. Bangalore 560018.|
|K.R.Puram, Near Santhemaala, Bangalore 560036.|
|4th Block, Jayanagar, 12th Main Road, Near Jayanagar Complex, Bangalore 560041.|
|National Highway, Manjushree Chambers, K R Puram. Bangalore 560036,|
|19/B, 2nd floor, V.K.Iyengar Road, Gandhinagar, Bangalore 560009.|
|No.69. Cholanayakanahalli, R.T.Nagar Post, Bangalore 560032.|
|Taluk office premises, Mini Vidhana Soudha, Anekal, Bangalore 562106.|
|No.7402, 9th ‘A’ Main. II Cross, I block, HRBR Layout, Kalyan Nagar, Bangalore 560043,|
|Near Vijayanagara Bus Stand, 2nd Main Road, Srirampura, Bangalore 560040.|
|No.13, Laggere Main Road, Andanappa Building, Parvathi Nagar Bus Stand, Bangalore 560058.||No.1105-9C, Begur Village,|
|No.4, Jatar Circle Road, Whitefield, Bangalore 560066,|
|5th Block, No 1034., Near Dhobi Ghat, Rajajinagar. Bangalore 560010.|
|No.25, D.M.Chambers, 3rd stage, RMEL Road, Jawaharlal Nehru Road, RajaRajeshwari Nagar, Bangalore 560098. Telephone: 22959329||No.1, Madanayakanahalli, Dasanapura Hobli, Bangalore.|
|RBMP Building, Near Ulsoor Lake, Tank Bund Road, Bangalore 560022.|
|No.40, IInd Stage, behind BDA Complex, Block I, Nagarabhavi, Bangalore.|
|Amrutha Nagara, Konanakunte.|
|Additional District Registrar, BDA Complex, Kumara Park West, Bangalore 560001.|
|1st floor, B M Complex, Mustandra Road, Opp. Dharmarayaswamy Temple, Varthur, Bangalore 560087.|
|No.11, I Main Road, Guttahalli,|
|No.4, Survey No. 33/4A, B H Road, Dasanapura Dakhle, Devannapalya, Bangalore North Taluka.|
|No.46, Next to Anjan Theatre, Magadi Road, Kempapura Agrahara, Bangalore 560023.|
|No.111, 9th Main Road, 3rd stage, Pillanna Garden, Kacharakanahalli, Bangalore 560045.|
|H C Puttaswamy Layout, Hesaraghatta, Bangalore North Taluk. Bangalore 560088.|
|Bangalore South Taluka, APCM Society, Kanakapura Road, Banashankari, Bangalore 560070.|
|NH-7, Opp. Police Station, Bellary Road, Bangalore North Taluk. Bangalore 562157.|
|No.1943, Tavarekere Kengeri Road, Tavarekere, Bangalore 562130.|
|No.70, 5th Main, Ganganagar, Bangalore 560 032.|
|No.430, Anna Building, Bommasandra Industrial Area, Hennagara Gate, Hosur Main Road, Attibele, Bangalore 560099. Telephone: 27836583|
|No.51/C, 3rd Main Road, Lorry Stand Godown Layout, APMC Yard, Yeshwanthpur, Bangalore 560022.|
|No 459/39/2, Bannerghatta Village, Opp. Police Station, Bannerghatta, Bangalore 560083. Telephone: 27828207|
|No.167-168, B T M Layout I Stage, Tavarekere Main Road, Bangalore 560076. Telephone: 22959360||No.2255, Karuna Complex, Sahakara Nagara, Rajarajeshwari Road, Bangalore 560092.|
|No.50/1. Church Street, Bangalore 560001.|
Registration offices in Bengaluru-Rural (zone-wise)
|Bengaluru east||Bengaluru north||Bengaluru south|
|Mini Vidhana Soudha, Hoskote, Bangalore Rural District 561203.|
|Taluk Office Premises. Devanahalli, Bangalore Rural District 562110.|
|Mini Vidhana Soudha Building, Magadi, Bangalore Rural District 562120.|
|Mini Vidhana Soudha Taluk Office, Doddabllapura, Bangalore Rural District 561203.|
|Taluk Office Premises, Mini Vidhana Soudha Building, Kanakapura, Ramanagar District 571511.|
|Mini Vidhana Soudha Building, Nelamangala, Bangalore Rural District 562123.|
|Taluk Office Premises, Old B M Road, Ramanagar, Bangalore Rural District 571511.|
|Taluk Office Premises, B M Road, Channapatna. Bangalore Rural District 571501.|
- The property can be sold at any price between the guidance value and the market value, if the latter is higher, without any additional tax implications.
- If you see a property being sold for less than the guidance value, check its documentation and details. The developer may be doing so to save on tax.
- Even if you buy a property at a lower value, you will still be required to pay the stamp duty at the guidance value. Not just that, Section 56(2)(vii)(b) of the Income Tax Act, 1961 says that if stamp duty value exceeds the purchase consideration, then, the difference between the stamp duty value and the purchase consideration will be treated as Income from other Sources. However, finance minister Nirmala Sitharaman, on November 12, 2020, announced that the centre has decided to allow a differential between the circle rate and the agreement value at a lower level by up to 20%. This is will be applicable till June 30, 2021, for only primary sale of residential units of value up to Rs 2 crores.
- It is advisable to approach your CA to understand the tax implications of buying or selling at a specific price.
Should I register property at guidance value or market value?
You can register the property at the guidance value if it’s lower than the selling price of the property. But if your property cost you less than the guidance value, you cannot choose to register at the lesser value. Guidance value is the minimum benchmark.
Why are there different Guidance Values of a property in the same city?
A number of reasons determine how much the guidance value is. For example, guidance value depends on the floor, building, locality, amenities, parking space, etc.
Where do I find information regards guidance value in Bengaluru?
You can approach the respective sub-registrar office for more details or refer to the numerous online websites for related information.