Guideline Value

GUIDELINE VALUES in TAMILNADU

GUIDELINE VALUE

What's Guideline Value?

Guideline Value is the Value of a Property fixed by the Government. Property buyers can not register below the Guideline Value. But, there is no bar for registering the property at Market Value which may be above the Guideline Value. The primary purpose of fixing the Guideline Value is to prevent evasion of Stamp Duty.

The Government takes into account the following while fixing the Guideline Value:
Developments in a locality, previous transactions at the particular Survey Number or Street etc.

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Why Should One Know the Guideline Value for a Property?

Guideline Value is the Value of a Property, below which a property can not be registered.
For Land or Plot, the Stamp Duty and Registration are for the Land or Plot. For New Apartments, it’s for the Undivided Share of Land or (UDS). For Resale of Houses and Apartments, the Guideline Value is for the value of the whole property.
 
The Stamp Duty is calculated as a percentage of the Guideline Value or Market Value which ever is high.
Knowing the Guideline Value will help one know the total outflow of funds in buying a property.
 
Currently in 2013, in Chennai, the Stamp Duty is 7% of the Value of Property, mentioned in the Document. This Value cannot be below the Guideline Value. May be, one would have negotiated a lower price for the Property.

Guideline Value Expressions

Guideline Value is expressed as Rs…………per sq.ft or Rs……….per Acre. For Cities and Towns and for developed Layouts, it may be in ‘per sq.ft’. For Agricultural Land or Undeveloped Lands it will be in ‘per Acre’

In Cities and Towns for an entire stretch of a Street or part thereof, may have the same Guideline Value. This is so even if the Survey numbers are different for different plot/land parcel in that Street/Locality.

Usually, the same Guideline Values are given for the Layouts newly approved by CDMA/DTCP.
 
But, for the ‘panchayat approved’ Lay-outs, this may not be the case. There the Guideline Value may vary with different plots in the same Lay-out. 
 

How to Know the Guideline Value of a Property

REGINET is the official website of the Registration Department. From this website, one can find the Guideline Values for the Survey Numbers and Streets. Required Data has to be input in this portal to get the Guideline Value. For this, one should know the Survey Number, Street Name or Village Name, and the Name of the Sub-Registrar Office. These details will be available in the Schedule of Property attached at the end of any Sale Deed.

Hike in Guideline values in Tamilnadu

Usually, the Government evaluates the Guideline Value every year and revises it. It usually ends up in a marginal hike in the Guideline Values. But, there was no revision for the last 5 years, since 2007. But last year when the hike happened, it appeared to be high. Several anomalies had cropped up in the revision exercise carried out in April 2012.
 
The state-level Valuation Committee appears to have decided to defer the upward revision.
So, the Tamil Nadu government did not carry out the Annual Upward Revision of Guideline Values this year. As per law, the State-level Committee has to revise the value every year in October. But, last year the government has deferred the decision in view of the objections raised.

In many areas of Chennai, the public raised objections over the New Guideline Values. The Guideline Values continue to be higher than the market value.

According to reports, the panel appointed by the department has so far done a downward revision of guideline values for 89 survey numbers. Throughout the state, several thousand petitions seeking downward revision are still pending. The Department told the Deputy Registrars to look into the complaints. The District-level Committees have to send the recommendations to the State-level Committee. 

This revision further affected Investment sentiment. It adds to the dull investment climate in the market today. In spite of all these, transactions have started picking up of late. The Chennai region saw an increase of 13% revenue collections.
 

Impact

This increase has resulted in fall in registration at the outset. But, it has some benefits also, especially for those who go in for Bank finance. They can now get better quantum of finance. Because the Banks sanctions Housing Loans on guideline value and not on the Market value.

Guideline Value Revision​

Posted 10/06/2017

The New Revision Will Further Dampen the Real Estate Market
The Tamilnadu Government has Slashed the Guideline Values by 33.33%. At the same time, it increased the Registration Fee to 4%, from 1%. This means the Stamp Duty and Fee for Transfer of a Property in Chennai, will now be 11% (7+4). Hitherto this, the Stamp Duty + Registration Fee was 8% (7+1),
 
This increase in Registration Fee has offset the savings that a buyer would have got as a result of slashing of Guideline Value. would have accrued to the Buyer. In fact, often the Cost of Acquisition of Property will be higher than what it was earlier. 

Effect on Property Prices as a Result of the Revision

The New Revision is likely to further add to the burden of the Buyers. This is because of the revised Registration Fee. So, this revision may not help in revitalising the sloppy markets.
 
The 2012 Guideline Values were very high. In some cases, the
slashed Guideline Values plus the Registration Fee may still be higher.
 
Also. the Stamp Duty is payable on higher of the two: the Document Value of the transaction or Guideline Value.
Consider a transaction when the price concluded is higher than the Guideline Value. If the parties decide to show this concluded price in the documents, the buyer will incur high cost.
The 4% Registration Fee will make the Cost more than what it would have been, had the old rates prevailed.
 

Impact on Housing Loan Applicants

Housing Loans are usually sanctioned on the Guideline Value. Banks should revise their norms and take the Market Value and Registration Fee into account. Otherwise, many borrowers may not be in a position to buy houses availing Housing Loans. This is so, because a borrower may find it difficult to bring in the increase Margin Money.
 
Negative sentiments already present in the Market. This Revision will have the effect of adding to the negative sentiment.
 

Who will Benefit?

Only in places, where the new Value after this Revision is almost at par with the Market Value, there will be a slight saving.

Also, if the Property is sold at the Revised Guideline Value, the Seller may benefit by way of Long Term Capital Gains, calculated based on Guideline Values only.

The Market will continue to Remain Sloppy

High Cost of Acquisition, Demonetisation, Ban on Unapproved Plots and the associated confusion, have dampened the Real Estate Market .This new announcements have further added to the already depressed sentiments prevailing.

The guideline values are hosted on the website http://www.tnreginet.net. 

 
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