The Karnataka government has recently proposed a revision of the property guidance value (Ready RECKONER) for real estate properties in the state as part of the Budget 2023-24. This proposal has now been implemented for Belagavi as well. Guidance value refers to the government-fixed rates below which a property cannot be sold. It is the basis for determining stamp duty on property purchases, also known as the ready reckoner rate, circle rate, or collector rate.
In Belagavi city and Taluk, the property guidance value has been increased. Citizens have been encouraged to register any objections they may have. While some parts of Belagavi city have not experienced rate increases, others have seen a significant rise of 40 to 50 percent. The final ready reckoner rate will be announced after the verification of objections.
During the meeting, the members of the sub-committee responsible for determining the rate of readjustment were also present. It was during this meeting that the new government rate for immovable property in Belagavi city and taluk was discussed.
The South Sub-Registrar Office announced these new rates on August 16 and they have been made available for public viewing. Objections can be filed within seven days. Similarly, the North Sub-Registrar Office announced an increased rate of ready reckoner on August 18, with objections also being accepted within seven days.
Despite objections raised against previous rate hikes, they were not considered. Therefore, it is highly likely that the ready reckoner rate will increase this time as well.
The guidance values, which establish the minimum value for property sales registration with the government, were last revised in 2018-19 but have remained unchanged due to the COVID-19 pandemic.
Recognizing that various changes over time have resulted in inconsistencies in the guidance values of immovable properties, the state government intends to address this issue by revising the guidance values for all properties in the state this year. Sources within the Stamps and Registration Department have confirmed that there may be an increase of 10-30 percent in the property guidance value.
In addition to revising the guidance values, the government aims to establish a scientific and rational guidance value system utilizing the Geographic Information System (GIS). This system will assign guidance values to properties located near roads and streets, and it will be accessible online to assist residents in accurately determining the stamp duty for any property. Initially, a pilot project will be launched in one district before expanding it to cover the entire state.
The rise in guidance value will result in increased costs for developers, impacting property prices in Belagavi and the City Corporation Property tax.
A fair way for setting these guidance values would be, govt should provide a guarantee that it will buy the property at a percentage of that guidance value. For example, at 50% of guidance value. If the guidance value is fair, then this transaction will bring an assured profit for the govt. They can purchase at 50% and sell it for 100% of the value.
If it can’t provide such a guarantee, even when profits are assured, then the guidance value can’t be fair.