Property rates in Bengaluru are likely to increase soon as the Karnataka government has announced an increase in the “guidance value” of properties, effective October 1. ‘Guidance value’ is the minimum selling price set by the government depending upon location and property type.
Karnataka Revenue Minister Krishna Byre Gowda has said that on the whole, the revised guidance value will increase by 25 to 30 per cent on an average, according to a PTI report.
Gowda also said registration department should revise the guidance value every year as per the law. However, the guidance value has not been revised for the last five years. It also leads to black money transactions. Non-revision of guidance value has also indirectly allowed black money transactions. Therefore, the new guidance value will be implemented from October 1.
Explaining the revision of the guidance value, the minister said in areas where the market rate and the guidance value are similar, the guidance value has been increased by 10 per cent, and in areas where the market rate is 200 times higher than the guidance value, the revised rate has been increased by 20 per cent to 25 per cent.
The market rate in Bengaluru’s Electronic City area is 500 times higher than the guidance value. “While the guidance value for land on the National Highway is 5 to 10 lakh, the market price is more than Rs 10 crore. In such areas the new guidance value has been increased by 50 per cent,” he said. Also, if the guidance value is higher than the market rate, the authorities have been directed to reduce the guidance value in such areas, the minister said.
The guidance value will be increased from 0 to 50 per cent “case by case” for each region, he said. On October 1, as a first step, the revised rate at Bengaluru will be implemented. For the rest, the sub-committee in each district will discuss and implement the new guidance value gradually, Gowda said.
Noting that there is a law which states that there should not be a huge difference between the guidance value and the market price, the minister said the authorities have been instructed to rectify this shortcoming. If anyone has objections to the guidance value revision, it can also be submitted. The officials will take note of it and implement the new guidance value, he said.
According to a recent report by Whitefield, “With Baiyappanahalli-Whitefield metro project in Begaluru likely to be fully operational by mid-year, rentals of office spaces in Whitefield are likely to go up by about 8-10 per cent over the next two years.”
The growth in rentals will also hinge upon the overall demand from corporates and macro-economic factors among others, it added.
Whitefield, the second largest office market in Bengaluru, has office stock of about 40.4 million square feet, with vacancy levels hovering around 17.2 per cent at the end of the last calendar year.