Daijiworld Media Network – Bengaluru

Bengaluru, Nov 15: Amid mounting criticism over a series of price hikes, the Karnataka government is preparing another move that could leave property buyers with a heavier financial burden.

The government is planning to revise the guidance values of properties across the state, with the proposed hike expected to push property values up by around 30%. While an increase in property value may appear good news at first glance, prospective buyers of houses, plots and apartments may have little reason to rejoice.

The revision is likely to make property purchases more expensive, as buyers will have to shell out higher amounts towards stamp duty and registration charges, calculated in line with the increased guidance values.

The guidance values were last revised in 2019 and 2023. If the latest proposal goes through, this will be the second revision in the past three years.

The government is planning to implement the revised rates after a gap of three years. The new guidance values are expected to come into effect either from December 15 or January 1. The public will be given 15 days to file objections to the proposed revision. Objections can be submitted through the offices of the respective sub-registrars.

A silver lining for farmers

While the proposed revision could make property purchases costlier, it may bring some relief to farmers whose land is acquired by the government. The move is expected to have a two-sided impact, potentially benefiting landowners while adding to the financial burden of those looking to purchase property.

A double-edged move

The proposed increase in guidance values is likely to have contrasting implications for different sections of society.

For farmers owning agricultural land, the revision could prove beneficial. When the government acquires land, the revised guidance values could serve as the basis for determining compensation, potentially fetching farmers higher amounts.

The same principle applies to land acquired for government projects in urban areas.

At present, property transactions attract taxes and charges of approximately Rs 7,600 for every Rs 1 lac of property value.

The proposed revision could also have an impact on those depending on bank loans to purchase properties. With an increase in property values, the loan amount they may be eligible for could also rise.

Currently, banks generally extend loans equivalent to 70-80% of a property's value. With the proposed increase in guidance values, the amount buyers can borrow may also go up.

Thus, while the revision could improve compensation for landowners whose properties are acquired for public projects, it is likely to make buying a home, plot or apartment more expensive for ordinary buyers.