Investment in real estate
should be without any risk, and should be possible to get reasonable returns
and appreciation in value.Investment is made after satisfying about the land and building prices.An investor experienced in real estate market will work
out the purchase price based on several considerations.Others who are not
knowledgeable in these matters may pay a higher price or involve in complications.
Location:
The land located in a rural area beyond the influence
area of the city will fetch a lower price than the land in the rural area
within the influence area of the urban settlement. Dry agricultural land will
fetch lower price than the irrigated land. In the same rural area the land facing
a highway will fetch more value than the land facing a village road away from
the highway. Prices are more for lands along the national highway or major district
road. The reason for this is the potential it has for industrial or commercial development.
In the urban areas, land value
will be more in bigger cities compared to lands in smaller urban areas.Lands
which are within the urbanisable area of the Master Plan will be costlier than
the lands in the green belt/ agricultural zone. Within the urbanisable area of
the master plan, the lands in commercial zone will be costlier than lands in residential zone or industrial zone.
Authorized properties with approval of competent authorities
like; BDA, BBMP, etc will be in demand and it is possible to get higher land
value. Lands within /nearer to the central area of the city will fetch more
value.
Schemes of development authorities:
Lands adjoining scheme areas of BDA/development
authorities will be costlier as it is possible to extend the developed roads and
utility services of the developed scheme.
Floor Area Ratio (FAR):
Lands with higher permissible FAR will be costlier as the
saleable area/usable area will be more. Builders consider this aspect in
proposing the lands for their project.FAR will be more for lands on wider
roads and such lands will have more demand.
Central area:
Lands in the central area or nearer to the central area of the city will get more value than lands in extensions or suburbs. Activities
which attract well to do public like; fashionable shopping area, modem malls, star
hotels, facing golf course or major public parks, etc will get higher land
value.
Nature of the locality:
Lands in localities like; M.G.Road, Lavelle Road, Palace
Orchard, High Grounds, etc will have higher land value compared to lands in localities
with lower income groups.
Quality of development:
Lands/buildings in projects of reputed developers/builders
will get higher rates due to the quality of construction, facilities provided, landscaping,
the type of people occupying the buildings, etc.Properties nearer to popular convents, and good civic amenities like park, play ground, etc, will have more
demand with higher
value.
In case of commercial complexes, the units facing the
road will have more demand and value compared to the units inside. Ground floor
units will have more demand than the upper floor units. Examples of this aspect
are the Barton Center, Public Utility Building, West Minister (on Cunningham
Road), etc.
Parking:
Reserved parking available in office units in commercial
complexes, and flats in apartments will have more demand than those without
reserved parking. It is worth to buy a unit with reserved parking even if extra
money is charged for the parking space as the vehicles are safe and cleaner in
the reserved parking.
Facilities in the building complex:
Higher value is possible in tall buildings with availability
of bore well in view of shortage of BWSSB water, and diesel generator to use
lift and general lighting during power cuts in summer months, and other
facilities for playing, club house, etc.
Guidance value:
For registration of properties before introduction of Guidance
Value by Government, the stamp value fixed was on the basis of discretion by
the Sub-Registrar. This discretion power was misused and corruption was rampant
for undervaluing property.There was also a procedure for appeal to the deputy registrar
on the value fixed by the sub-registrar, which power was again misused for reasons
known. Government used to lose lot of revenue by undervaluation of properties by
the property owners in collusion with the officials of the registering authorities.
It was a good proposal of Government in fixing the guidance
values for both lands and buildings avoiding the discretion power of registering
authorities and under valuation by property owners. Another advantage of the guidance
value was arriving at the property tax in the Self- Assessment Scheme of the
BBMP / local body on the basis of guidance values fixed for various areas of
the city.
Guidance value is also useful in Akrama -Sakrarna Scheme
for fixing the fine amount for regularizing unauthorized sites and buildings, and
violations from building sanctions.This scheme was withdrawn after agitations from
the residents welfare organizations and law abiding citizens against the scheme,
and agitations also by property owners involved to reduce the fme amounts which were heavy.There
is also a case pending in the High Court against the scheme.The bill sent by the
Government was returned twice by the Governor. The first time it was returned stating
that the scheme will encourage unauthorized developments and building violations.The observation second time was to submit the bill only after disposal of the
case pending in the High Court.BBMP/BDA which are responsible for allowing
unauthorized constructions and building violations are keen to introduce the scheme
to get huge amounts as fine for regularization.
Periodical revision of Guidance Value may be done once in
two years to update the values according to the increase in market values, latest
trend in potential for development ,etc.,and to get more revenue.The aspects mentioned
in this article may be considered while revising the Guidance Value. As far as possible,
there should be no element of discretion by the officials of the registering
authorities to avoid corruption and under valuation. The details of Guidance Value
should be clear to the investor to plan the investment. The procedure for appeal
should be simple and quick.
Hope the Revised Guidance
Value will be clear and simple, the values are almost equal to the market values,
and useful to the investors in real estate.
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