A revision of the guidance value of properties in Karnataka is now in the offing, given the huge gap between the current guidance value and the prevailing market value of properties. The move also comes at a time when the Stamps and Registration Department has reported lower revenue collection owing to multiple reasons.

The difference between the guidance value and the market value is particularly stark on the city’s outskirts, where demand for agricultural land for real estate development has been huge.

The market value is a whopping 10 times that of the guidance value or even more in several locations in districts abutting Bengaluru such as Chickballapur, Bengaluru South (formerly Ramanagara), and Bengaluru North (formerly Bengaluru Rural) districts. The department’s information gathering has also found a difference of 60% between the guidance value and market value for sites in several urban centres.

The last revision of the guidance value in the State came in October 2023, while the department’s mandate allows it to revise the guidance value annually.

The GIS-based guidance value revision will offset the gap in revenue collection, and the valuation process is set to begin soon, sources in the Revenue Department said.

Curbing black money

“The proposed revision will not only help increase revenue but also curb the circulation of black money in the market. Black money gets exchanged whenever there is a huge difference between the guidance value and market value,” said the source. Further, sources said that farmers could benefit from a higher guidance value during the acquisition of their agricultural land or a better value for their land in any other transactions.

Sources said that discussions are under way to determine the extent of guidance value enhancement. “In the city areas, the rate of enhancement for sites, houses, apartments, row houses, and villas is being discussed along with the quantum to be enhanced for agricultural land.”

It is learnt that fresh criteria could be adopted this time to consider the quantum of enhancement of guidance values for properties located closer to national and State highways, district roads, and 80-ft roads. The discussion is also about the enhancement of guidance value for apartments — whether uniform rates should be applied or if it should be based on the prevailing market rate in the area.

Digital stamps

Meanwhile, the department is also looking at increasing the revenue from the proposed implementation of digital stamps that will prevent under-valuation in use of stamp paper in the non-registrable documents category. With the Cabinet recently approving the A khata policy in which private roads leading to sites/apartments will be declared as public roads, lakhs of properties will get A khata, which could result in a spurt in transactions, sources said.

The department is hoping for increased revenue collection when the Rural Development and Panchayat Raj Department releases draft khatas for about 85 lakh properties this year and urban local bodies release draft khatas for about 30 lakh properties.