Handy Guide to Understanding Guidance Value in Bangalore for Property Buyers

When you are buying property in Bangalore, one of the key factors to understand is the guidance value. This is an important concept for every property buyer and can significantly affect the price you pay and how you plan your finances. But what exactly is guidance value? And why should it matter to you as a potential homeowner?

In this guide, we will take you through everything you need to know about guidance value in Bangalore and how it influences property transactions.

What is guidance value?

The guidance value is the minimum price at which a property can be registered with the government. This value is set by the Karnataka government and varies based on the area, type of property, and its location. In simpler terms, it is the benchmark rate that property buyers and sellers should expect when dealing with real estate transactions.

Guidance value is important because it helps the government calculate stamp duty and registration fees. It also ensures that properties are not sold at prices lower than their market value, keeping the real estate market fair and transparent.

How is guidance value determined?

The guidance value of property in Bangalore is decided by the Department of Stamps and Registration, which considers several factors to determine it. Some of these factors include:

• Location of the property: Properties in prime areas typically have higher guidance values than those in peripheral areas.
• Property type: Residential properties, commercial properties, and vacant land each have different guidance values.
• Size and structure: A larger property with more built-up area will generally have a higher guidance value than a smaller one.

This value is revised periodically by the government to reflect changes in the market. You can easily find the guidance value for any property by visiting the official government portal or checking with the local sub-registrar office.

Importance of guidance value

Understanding the guidance value is crucial for both property buyers and sellers. Here is why:

• Stamp duty and registration fees: The government calculates these fees based on the guidance value. So, if the guidance value is high, the stamp duty and registration fees will also be higher. Typically, stamp duty is around 5% of the market value or guidance value of the property, whichever is higher.
• Fair market value: The guidance value acts as a safeguard to ensure that properties are not undervalued for the sake of minimising taxes. Without this system, buyers and sellers could manipulate the price to evade taxes.
• Loan considerations: Banks and financial institutions also consider guidance value while approving home loans. In many cases, they may not approve loans based on a value higher than the guidance value, as it is seen as a more realistic market price.

Guidance value and home loans

As a homebuyer, understanding the guidance value is also important when you are planning to take out a home loan. Banks and lending institutions often use the guidance value as a reference when approving home loans. The loan amount that you can borrow may be limited to the guidance value, even if the property’s market value is higher.

For instance, if you are buying a property in an area where the guidance value is Rs. 60 lakh but the actual market value is Rs. 70 lakh, the lender may consider the Rs. 60 lakh as the property value for the loan approval process. This could mean you need to make a larger down payment.

So, before finalising your property deal, it is wise to check the guidance value of the property and factor it into your home loan calculations.

How to check the guidance value in Bangalore?

If you are looking to check the guidance value of a property in Bangalore, here is how you can do it:

• Visit the official portal: The Karnataka government has an online portal where you can search for the guidance value of properties in different areas of Bangalore.
• Sub-registrar office: You can also visit the nearest sub-registrar office and inquire about the guidance value for a specific location or property type.
• Online property portals: Several property websites provide guidance value information for specific localities in Bangalore. These platforms can be a helpful tool, especially for quick research.

How does guidance value affect property transactions?

Guidance value plays an essential role in property transactions because it dictates the minimum price at which a property can be registered. If the seller tries to sell the property for less than the guidance value, the transaction cannot be legally registered.

For example, if the seller offers the property for Rs. 50 lakh, but the guidance value is Rs. 55 lakh, the buyer must pay at least the Rs. 55 lakh value for the property to be registered. This ensures transparency and helps prevent tax evasion through undervaluing properties.

Can the guidance value be lower than the market price?

Yes, sometimes the guidance value of property in Bangalore is lower than the market price. This can happen in areas where the demand for real estate has surged, and the market value has risen rapidly due to development and infrastructure growth.

If you are buying in such an area, you might find that the guidance value does not fully reflect the actual cost of the property. This can make home loan planning a little tricky, as banks and financial institutions may only lend based on the guidance value and not the higher market price.

Explore Bajaj Housing Finance Home Loan

Understanding guidance value is essential, but so is choosing the right financial partner for your home purchase. If you are looking to purchase a residential property in Bangalore and are in need of funds, consider Bajaj Housing Finance Home Loan. When you apply for a home loan with us, you benefit from:

1. High loan amount: Secure funding up to Rs. 15 crore* to turn your dream home into reality.

2. Low interest rates: Enjoy interest rates starting 8.25%* p.a, and EMIs as low as Rs. 741/lakh*.

3. Quick approval: Get approved within 48 Hours* of applying – sometimes even sooner.

4. Flexible repayment tenure: Choose a repayment term of up to 32 years for comfortable EMIs.

5. Simple application: Take advantage of doorstep document collection for a smooth process.

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Whether you are buying your dream home or investing in real estate, Bajaj Housing Finance ensures a seamless journey. Explore your options today and turn your property dreams into reality.