Glossary
Guidance Value
Guidance value is the minimum value Karnataka sets for property in an area. Stamp duty is charged on it or on your agreement value, whichever is higher.
In plain words
The Karnataka government publishes a rate for land and buildings in every area. That rate is the guidance value. Other states call it the circle rate or ready reckoner rate. It is set by a valuation committee under the Karnataka Stamp Act, and it is revised from time to time.
The guidance value is not the market price. It is a floor for tax. When you register, stamp duty and registration fees are worked out on your agreement value or the guidance value, whichever is higher.
A worked example (illustrative)
Say your agreement value is ₹70 lakh, and the guidance value for that flat works out to ₹75 lakh. Duty is charged on ₹75 lakh. At an illustrative 5% duty, that is ₹3.75 lakh rather than ₹3.5 lakh. The ₹25,000 difference has to come from your own pocket, since banks do not usually fund stamp duty.
If the guidance value is lower than your price, nothing changes: duty is on the agreement value.
Why it matters to you
- It can raise your registration costs, so check it before you fix your budget.
- For TDS under Section 194-IA, the 1% is now worked out on the higher of the price and the stamp duty value.
- A revision can change your costs between booking and registration.
You can look up guidance values on the Karnataka registration department’s site, or ask the builder for their working. Our stamp duty calculator takes both values and uses the higher one.
Read more on the blog
Related terms
See all glossary terms. This page explains a term; it is not legal or tax advice, and rupee figures are illustrative.
FAQ
Guidance Value: common questions
Is guidance value the same as market price?
No. It is a government floor for stamp duty. The market price can be higher or lower than it.
Who sets the guidance value?
The Karnataka government, through a valuation committee under the Karnataka Stamp Act. It is revised from time to time.
What if my price is below the guidance value?
Stamp duty and registration are then charged on the guidance value, so budget for the higher figure.
Does guidance value affect my home loan?
Banks lend on their own valuation of the home. Guidance value mostly affects stamp duty, registration and TDS.
Want someone to walk you through it?
Ask the Reeva team about this, or anything else on your first-home paperwork. We will call back, with no pressure to buy.