Bangalore New Guidance Value 2024 & Its Impact on Builders and Buyers

In 2024, Bangalore’s new guidance value is reshaping the real estate landscape, offering both developers and homebuyers a fresh perspective on opportunities and investments in the city. Bangalore had unveiled its new guidance value in September 2023, causing ripples in the property landscape.

The Silicon Valley of India is a city that constantly evolves and reinvents itself. The ever-changing real estate landscape is a critical aspect of this transformation. In Sep 2023, Bangalore introduced its new guidance value, a pivotal parameter in property transactions that can influence everything from property prices to government revenues.

Understanding the implications of Bangalore’s new guidance value 2024 is crucial for residents and investors. Whether you are a prospective homebuyer, a real estate investor, or simply curious about the city’s economic dynamics, this blog will provide valuable insights into Bangalore’s 2024 guidance value and its far-reaching effects on the city’s real estate market.

What is Guidance Value in Bangalore?

In Bangalore, the guidance value / circle rate / ready reckoner rate, is the minimum value at which a property can be registered for official transactions. It is determined by the state government’s revenue department, and is used as a reference point for property registration and for calculating stamp duty & registration fees.

Bangalore guidance value 2024 serves as a benchmark so that property transactions are conducted fairly and transparently in the city, preventing underreporting of property prices to avoid taxes & fees. It also aids in generating revenue for infrastructure development and public services.

Here is an example to illustrate the concept of guidance value. Let us say you are interested in buying a residential apartment in a particular area in the city. The seller quotes a sale price of ₹1 crore for the property.

However, when you visit the local sub- registrar’s office to register the property, you discover that the guidance value 2024 for similar properties in that area is ₹1.2 crores as per the government’s assessment. In this scenario:

• Stamp Duty and Registration Fees:

  These are based on the guidance value or the actual sale price – whichever is higher. In this case, you would have to pay stamp duty and registration fees based on ₹1.2 crores, not ₹1 crore.

• Impact on Property Transactions:

  Bangalore guidance value 2024 can impact property transactions significantly. If the guidance value is higher than the sale price, it can lead to higher expenses for the buyer.

• Government Revenue:

  Guidance value is used to collect revenue through stamp duty & registration fees. Higher guidance values can result in increased revenue for the government.

How to calculate the Guidance Value in Bangalore? [Kaveri Guidance Value Calculator]

To calculate the Guidance Value in Bangalore, you can use the Kaveri Online Services portal, which provides a Guidance Value calculator. Here are the steps to calculate it:

1. Visit the Official Kaveri Online Services Portal: Kaveri Online Services (karnataka.gov.in)
2. Create an account with your details and log in.
3. On the portal’s homepage, you will find numerous services and options. Click the ‘Guidance Value Calculator’ (or a similar option, as the site’s interface might get updated periodically).
4. Enter specific details of the property for which you want to calculate the guidance value. These details may include:
   1. Location: Enter the locality, street name, and other location-related information.
   2. Type: Specify whether the property is residential, commercial, agricultural, etc.
   3. Dimensions: Provide the dimensions of the property, such as the site area (in square feet or square metres).
   4. Category: Depending on local regulations, properties may fall under various categories
5. Once you have entered all the required information, click the ‘Calculate’ button. The calculator will generate the guidance value 2024 for your property, based on the data provided by you.

Please note that the exact steps and details may vary slightly, depending on updates to the Kaveri Online Services portal or local regulations.

Importance of Paying the Guidance Value of a Property in Bangalore 2024

Paying the guidance value of a property in Bangalore in 2024 is crucial because it:

1. Ensures legal compliance and transparency in property transactions
2. Accurately determines stamp duty & registration fees
3. Prevents legal issues and tax evasion
4. Contributes to government revenue for public services
5. Provides a reference for property valuation and market stability

New Guidance Value in Bangalore for Different Types of Properties 2024

The guidance values for several properties in Bangalore can differ based on the property’s location and type. The government’s revenue department typically sets these values, which are subject to change over time. Here’s how guidance values could be different for various property types:

Type of property	Tax rate
Residential property	0.2% of guidance value Bangalore for properties on rent
Residential property	0.1% of guidance value Bangalore for self-occupied properties
Fully vacant land	0.025% of guidance value
Commercial property	0.5% of guidance value

Factors Influencing the Guidance Value Revision

Following are the factors that influenced the guidance value revision in Bangalore in 2023.

• Real estate market conditions: Current trends and dynamics of the real estate market influence property values
• Economic Factors: Overall economic health and factors such as inflation affect property valuations
• Supply-demand Dynamics: Changes in the availability and demand for properties impact their market value
• Infrastructure Development: New infrastructure projects can increase property values in the surrounding areas
• Location: The desirability and accessibility of a location affect property prices
• Stakeholder feedback: Input from real estate stakeholders can shape value assessments
• Government revenue needs: Adjustments in property values help meet fiscal requirements
• Legal changes: New laws and regulations can necessitate value revisions
• Data analysis: Comprehensive data review ensures accurate property valuations

New Guidance Value 2024 Impact on Builders

The new guidance values in Bangalore, revised in September 2023, can have significant implications for developers in several ways:

• Cost of Land Acquisition

  Increase in Land Costs: Developers will face increased land acquisition costs as the new guidance values are higher than previous ones. This can impact their ability to purchase prime land in desirable locations.

  Impact on Project Budget: Higher land acquisition costs can increase the overall project budget, affecting financial planning & resources.

• Project Viability

  Profit Margins: Guidance values directly affect developers’ profit margins. Higher values can reduce profit margins, especially if developers cannot pass on the increased costs to buyers.

  Market Demand: Developers may need to reassess their pricing strategies if properties become less affordable due to higher guidance values – thus influencing buyer demand.

• Strategies for Builders

  Location Selection: Real estate players may need to choose project locations strategically. They may opt for areas with lower guidance values to keep costs in check.

  Pricing and Marketing: To remain competitive, developers may need to adjust their pricing & marketing strategies to accommodate Bangalore guidance values 2024.

  Negotiations: Developers may need to negotiate with land sellers to mitigate the impact of higher guidance values. Negotiating favourable terms becomes essential.

• Stamp Duty and Property Tax

  Since stamp duty in Karnataka is calculated at 5% of the guidance value, and property tax is 2% of the stamp duty amount, the hike directly results in higher costs for property transactions and increased property taxes.

• Impact on Real Estate Market
  

  The revised guidance values in 2024 aim to align property prices more closely with market rates, thereby reducing the scope for black money transactions in the real estate sector.

New Guidance Value 2024 Impact on Buyers

The new guidance values in Bangalore revised in September 2023 can significantly impact homebuyers in the following ways:

Property Affordability

• Affordability Challenges: Higher guidance values can make properties less affordable for buyers. Those looking to purchase homes or investments may need help to enter the market, particularly in prime areas.
• Budget Adjustments: Homebuyers may need to adjust their budgets or consider properties in locations with lower guidance values.

Loan Eligibility

• Impact on Loan Amount: Guidance values influence the valuation of the property, which in turn affects the down payment amount, assuming loan eligibility of buyers remains constant. Higher guidance values may lead to lower loan-to-value ratios, requiring buyers to provide a larger down payment.
• Reassessment of Financial Plans: Buyers may need to reassess their financial plans and loan eligibility based on the new guidance values, potentially delaying their property purchase.

Strategies for Buyers

• Location Choices: Homebuyers may explore areas with lower guidance values to maximise their purchasing power and find more properties within their budgets.
• Negotiation: To offset the impact of higher guidance values, buyers may seek price reductions or concessions by negotiating with sellers.
• Loan Planning: Buyers should consult financial institutions to understand the loan terms and eligibility criteria based on the revised guidance values.

Property Tax in Bangalore in 2024

Despite the statewide changes in guidance value, the Bruhat Bengaluru Mahanagara Palike (BBMP) has confirmed that property tax rates in Bangalore will remain unchanged for the 2024-25 fiscal year. This clarification came after false rumours circulated about a potential hike. BBMP will continue to use the existing zonal system for property tax computation rather than transitioning to a guidance value-based system as previously proposed.

These updates are crucial for property buyers and sellers in Bangalore, as they significantly affect transaction costs and the overall real estate market dynamics. For detailed calculations and to check the latest guidance values, property stakeholders can visit the Kaveri Online Services portal at Kaveri Online.

List of Sub-Registrar Offices in Bangalore (Urban)

Rajajinagar District	Basavanagudi District	Shivajinagar District	Gandhinagar District	Jayanagar District
Rajajinagar	Basavanagudi	Shivajinagar	Gandhinagar	Jayanagar
Yashwanthpura	Chamarajapete	Indiranagar	Malleswaram	Shanthinagar
Vijayanagar	Banashankari	Halsuru	Ganganagar	BTM Layout
Srirampuram	Anekal	Banasawadi	Hebbal	Kengeri
Peenya	Attibele	KR Puram	Kacharakanahalli	Rajarajeshwari nagar
Laggere	Sarjapura	Mahadevapura	Byatarayanapura	JP Nagar
Nagarbhavi	Jigani	Bidarahalli	Yelahanka	Bommanahalli
Madanayakanahalli		Varthur	Jala	Begur
Dasanapura			Hesaraghatta	Tavarekere

Source: 99acres.com

List of Sub-Registrar Offices in Bangalore (Rural)

• Nelamangala
• Doddaballapura
• Devanahalli
• Nelamangala
• Hoskote

Guidance Value in Karnataka: Latest Updates 2024

• Record Revenue Collection
  

  On 28 September 2023, the Karnataka Stamps & Registration Department achieved an unprecedented milestone by collecting ₹311 crore in a single day from the registration of 26,000 properties. This record-setting revenue marks the highest single-day collection in the department’s 157-year history.

• Latest Guidance Value Hike
  

  Effective from 1 October 2023, Karnataka implemented a significant increase in the guidance value of properties, ranging from 30% to 50%. The hike affects property taxes as stamp duty in Karnataka is calculated at 5% of the guidance value, and property tax is 2% of the stamp duty amount. This adjustment aims to bring guidance values closer to market rates and reduce illegal transactions in the real estate sector.

• Impact on Bangalore Development Authority (BDA) Housing Units

  Following the state government’s guidance value hike, the Bangalore Development Authority (BDA) is considering a 10% price increase for its housing units. This proposal, affecting flats and the ambitious Puneeth Rajkumar Housing Complex villa project, was discussed in a BDA meeting in 2023. The potential price hike comes as over 1700 units across 10 different projects remain unsold, posing challenges for sales.

  The new guidance value, which increased by an average of 25-30%, aims to minimise the gap between market rates and guidance values, as previously the rates remained unchanged for five years. The revised rates were implemented in Bangalore first, and gradually rolled out to other districts after consultations with local sub-committees.

  Additionally, the government has offered periodic rebates, with a recent 10% rebate extension aimed at supporting the real estate sector.

Upward Valuation Rates in Real Estate – The Gap Between Lower-end Developers and SOBHA Developers 

When comparing lower-end developers to established ones like SOBHA, several key factors contribute to the differences in these rates. SOBHA is known for its quality construction, prime locations, and premium amenities. Hence, SOBHA homes often experience higher valuation rates.

Their reputation for reliability and professional property management also attracts buyers & investors, boosting demand and contributing to property appreciation. This higher valuation ensures that the guidance value hike of Sep 2023 will not impact SOBHA homes.

Buyers and investors should thoroughly research and consider their goals when evaluating property options. While established developers like SOBHA may see stronger property appreciation due to various advantages, it is essential to acknowledge that market dynamics and individual property characteristics continue to influence the actual upward valuation rates, making comprehensive due diligence a crucial step for those navigating the real estate market.

Legal and Compliance Considerations

Legal and compliance considerations for Bangalore’s Guidance Value 2024 include accurate stamp duty and registration fee calculations, transparent property documentation, verification of property titles, consultation with legal experts, payment of applicable taxes, staying updated on government notifications, proper stamping & registration, and maintaining transaction records. Compliance is vital for smooth property transactions and legal protection.

Conclusion

In the ever-evolving realm of real estate, Bangalore’s new Guidance Value for 2024 has ushered in a wave of change, shaping the city’s property landscape. Understanding and adapting to these revisions is paramount for anyone involved in property transactions.

In the end, whether you are a prospective homebuyer, investor, or seller, the key to success in Bangalore’s real estate market lies in staying informed, seeking legal counsel when needed, and navigating these changes confidently. As Bangalore continues to evolve, so will its real estate sector, and those who adapt wisely will thrive in this dynamic city of opportunities.

FAQs

1. How to find guidance value of property in Bangalore?

You can find guidance value of a property in Bangalore at the official portal of Kaveri Online Services (Kaveri Online Services (karnataka.gov.in) or by consulting with the local sub-registrar's office.

2. How to find out SR value in Bangalore?

To find out SR (sub-registrar) value in Bangalore, you can visit your nearest sub-registrar's office or use the Kaveri Online Services portal (Kaveri Online Services (karnataka.gov.in)

3. How to check guidance value in Karnataka?

To check guidance value in Karnataka, you can access the Kaveri Online Services portal (Kaveri Online Services (karnataka.gov.in)

4. What is the guideline value of Bangalore rural district?

The guideline value of Bangalore rural district can be obtained by visiting the local sub-registrar's office or Kaveri Online Services portal (Kaveri Online Services (karnataka.gov.in)

5. What is the hike in guidance value in Karnataka?

The hike in guidance value in Karnataka is up to 50%, effective October 2023. This number can vary from area to area, which depends on government assessments and market conditions. It is advisable to check the latest guidance values for specific areas and property types.

6. What is FAR in BBMP limits?

FAR in BBMP limits is the maximum permissible floor area that Bruhat Bengaluru Mahanagara Palike allows to construct on a plot of land. Floor Area Ratio is subject to local zoning regulations, and it may vary by location.

7. How registration value is calculated in Bangalore?

Registration value is calculated in Bangalore based on the guidance value or the actual sale price of the property, whichever is higher. Stamp duty and registration fees are then calculated based on this value.

8. What is the registration charge for rural sites in Bangalore?

The registration charge for rural sites in Bangalore is dependent on the property's value and location. It can be determined by consulting with the local sub-registrar's office.

9. How many gram panchayat in Bangalore rural district?

There are 66 gram panchayats in Bangalore Rural District, but this count may change over time. It is best to refer to the official government sources for the current count.

10. What is the difference between guidance value and consideration value?

The difference between guidance value and consideration value is that guidance value is the minimum value for which a property can be registered for official transactions; it is set by the government. Consideration value is the actual sale price between the buyer and seller. Registration is typically based on the higher of these two values.

11. Should I register property at guidance value or market value?

You should register property at guidance value or market value, depending on whichever is higher, to comply with legal requirements.

12. How is house property value calculated?

House property value is calculated based on location, size, amenities, market conditions and guidance value. It can differ from property to property, and is often determined through professional property appraisal.