It’s official. The higher you want to stay, the more you will have to pay. This concept has been officially introduced by the Stamps and Registration Department, in the new guidance values issued on 12 August, 2013.
Though the concept wasn’t explicitly publicised, it has been in existence for a few years now. Those who wish to buy flats or apartments were being charged extra by builders, depending on the amenities and the floor on which they want to buy the space.
The guidance values published in 2011 had a flat rate for all floors in any given apartments. Now the government too has adopted the new, floor-based, amenity-based concept.
This system is applicable for all apartments, villas, villaments, tenements, gated community houses, cluster houses and row houses.
The government has introduced this after a field observation. Sources from Stamps and Registration Department point that 9% of Bangaloreans can buy properties which are above Rs 1 crore. Such people want various facilities and services in their apartments or commercial complexes, and opt for penthouses or apartments. They can also afford to pay more for the amenities.
What is floor-based valuation concept?
According to the Stamps and Registration Department, floor-based valuation means that apartment dwellers staying from ground to 5th floor will not pay any additional amount, apart from the land charges guidance value and stamp duty based on that. But from 6th floor to 15th floor, buyers will have to pay 0.5% more for each floor. So buyer will pay extra the higher he goes.
But this cap is only till the 15th floor. From the 16th floor onwards, the value is only 5% more than the actual value, however high the building is – even up to 40th floor. For example, if the property is worth Rs 1 crore, the buyer will now pay an additional amount of Rs 5 lakh and a stamp duty of Rs 25,000, on whichever floor the space is located, after 16th floor.
An unhappy proposition?
Neetu K, a homemaker, who is searching for an apartment, says she does not understand this concept at all. “It is like punishing people who are buying an apartment in high rise buildings. If the government wants to charge an additional amount for each floor, then it should be implemented for every floor. Why is the discrimination from the 5th floor onwards?”
Krishna Kumar, proprietor of KK Retails, a real estate agency in Jayanagar 7th Block, says: “The floorwise valuation is new and confusing. Buyers are very choosy when it comes to purchasing an apartment. This type of valuation will only burden them and make them reluctant to buy it.”
The new system will generate more revenue for the government.
‘Builders are already charging extra!’
However, N A Afzal, Treasurer of Homemakers and Realtors, who is also the Chairman- Legal Affairs of Bangalore Realtors Association – India (BRA-I), says that the builders already have the same floor-based valuation in place. They charge the buyer around Rs 50 per square foot (psqft) extra for every floor. For example, if the cost in the ground floor for an area is Rs 2,000 psqft, the builder for the first floor charges Rs 2050 / sqft. It keeps increasing for every floor.
This is because the cost of construction increases with every floor. The foundation has to be deeper, more energy and resources are used in construction, transportation of materials and so on. The builder always charges the buyer for it. This is not mentioned in any rule book, but most builders follow it.
“This is happening everywhere. Buyers too prefer homes on higher floors because there is less noise, more privacy, less pollution, better view of the city from high rise window, cooler breeze and so on. So when they are paying more for purchasing, there can be more stamp duty on higher guidance value. This is acceptable,’’ adds Afzal.
Thus, in effect, the Stamps and Registration Department has legalised the already existing price structure among the high rise apartments.
Pay more for extra amenities
Under amenities-based valuation, 15 categories or groups have been listed, for which the builder will have to pay additional charges based on guidance values. The buyers in turn will be paying more. The first four amenities (from any of the 15) provided by the builder will not have any effect on guidance value. For every amenity after this, builders will be charged.
The 15 groups of amenities are:
- Club house, community hall, indoor amphitheater, conference hall, health club, temple, party hall, card room, reading room, library, banquet hall, dance and karaoke hall, party area, party lawn, carom room and similar types of amenities.
- Jogging track, running track, cycling track, walking track, pebble pathway, reflexology path and similar types of amenities.
- Children play area, tot cot, children game area, garden, water body, decorative pool, plantation garden, barbeque pits, crèche, landscape area, fountain and similar types of amenities.
- Canteen, mall, commercial space, ATM, bank, HOPCOM, Janatha Bazar, Nandini Milk out layout, Provision store, lounge and foyer, cafeteria, supermarket, plaza and similar types of amenities.
- All types of outdoor play area, Badminton, Tennis, Basket ball, Volley ball, Base ball, Cricket, Football, Hockey, Golf field and similar amenities.
- All types of indoor game areas, squash, snooker, Table tennis, Indoor games area and similar amenities.
- Swimming pool indoor, kids pool, wading pool, aqua gym and similar amenities.
- Cargo lift, elevator, mechanical lift for car park, high speed elevator and similar amenities.
- Surveillance of common area, manned security with video surveillance intelligent security, motion sensor based lighting multi camera security, CCTV, Gated community, Intercom, Wifi Internet parlor, video conference facility, generator, UPS, kiosk, visitor tracking system and similar types of amenities.
- Helipad and Golf Field.
- Outdoor amphitheatre, open air theatre, open stage and similar types of amenities..
- Health clinic, ayurvedic parlor, massage parlour, beauty parlour, spa, aerobics, yoga, meditation, unisex parlour, Steam and Sauna Jacuzzi, gym, day care center, health club and similar types of amenities.
- Indoor amphitheatre, dance and karaoke hall, drama stage, home theater hall.
- Home automation, smart home, IP door lock, prepaid power supply, piped cooking gas supply, gas, bank, gas detector.
- Nearness to airport, railway station, bus station (About 5 kms.)
After ANY or ALL amenities from ANY FOUR groups above, available in the apartment you buy, there will be an additional increase of 1% on value of super-built area and additional higher floor area for EVERY or ALL facilities in any other group. This excludes car parking.
It means that for the 6th group of amenities the additional value is of 1%, for 7th group of amenities its 2%, for 8th group of amenities 3%, for 9th group of amenities 4%, for 10th group of amenities 5%, for 11th group of amenities 6%, for 12th group of amenities 7%, for 13th group of amenities 8%, for 14th group of amenities 9%, and for 15th group of amenities 10% of value of super-built area and additional higher floor area will be charged.
The guidance value notification also points that there will be no additional increase in valuation if the builder offers more than the listed 15 groups of amenities.
But there is some good news. The Stamps and Registration Department has fully exempted the following amenity groups from guidance value assessment. They are:
- Rainwater harvesting, solar power, solar water heater, fire fighting, fire prevention, green building concept, low carbon material usage and similar types of amenities.
- Sewage treatment plant, solid waste management, individual garbage chute, reflective roofs, water recycling / reuse plants.
Where is new guidance value copy available?
You can see the stamps and registration website for a pdf version of the final notification at http://www.karunadu.gov.in/karigr/. The hard copies and CDs of the final notification are also available at the office of the various sub-registrars.
The Department divides the city into six divisions. The cost of each notification book differs, based on the number of pages.
- Rajajinagar copy : Rs 115
- Jayanagar copy : Rs 163
- Basavanagudi copy: Rs 195
- Gandhinagar copy: Rs 183
- Shivajinagar copy: Rs 263
- Bangalore rural copy: Rs 271
- Ramanagara copy: Rs 211
In the website, you can also check the address of their nearest sub-registrar’s office.
However, here’s the catch. The hard and soft copies of the final guidance value notifications are mostly in Kannada, except for the names of apartments/gated communities. So you will need the help of others to read and understand the notification.
So you better learn Kannada if you haven’t already!
How was the guidance value evaluated? What does real estate community feel about new guidance values? How does the new value affect those who want to invest in land? Citizen Matters will answer all these questions in the coming days.
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