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Difference between Market value and Guide line value

Market Value is the actual price of a property based on demand and supply, while Guideline Value is the government-fixed minimum price for registration. Market Value fluctuates with trends, whereas Guideline Value is periodically revised. Understanding both helps in making informed real estate decisions, ensuring transparency and compliance.

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Difference between Market value and Guide line value

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  1. www.livehomes.in MARKET VALUE VS. GUIDELINE VALUE: UNDERSTANDING PROPERTY VALUATION IN REAL ESTATE

  2. Introduction When buying or selling property, two key terms often come up in valuation discussions: Market Value and Guideline Value. Understanding these concepts is crucial for making informed real estate decisions.

  3. What is Market Value? Market Value refers to the actual price at which a property is bought or sold in an open market, determined by factors such as demand, location, amenities, and economic trends. It reflects the price a willing buyer and seller agree upon in a competitive environment. Factors Affecting Market Value: Location: Proximity to commercial hubs, schools, hospitals, and transport facilities. Infrastructure: Availability of roads, water supply, electricity, and future development plans. Demand and Supply: High demand and low supply increase market value. Property Condition: Well-maintained properties command higher prices. Government Policies: Tax regulations, interest rates, and legal aspects influence market trends.

  4. What is Guideline Value? Guideline Value (also called Government Value or Circle Rate) is the minimum price set by the government for property registration. It serves as a benchmark for stamp duty and registration charges calculation. Key Features of Guideline Value: Fixed by the state government based on location and property type. Used for calculating stamp duty and registration fees. Usually lower than market value, but periodic revisions are made. Helps prevent underreporting of property transactions.

  5. Market Value vs. Guideline Value: Key Differences Feature Market Value Guideline Value Actual price based on demand & supply Definition Government-set minimum price Determined By Market conditions & negotiations State Government Purpose Fair property valuation Stamp duty calculation Fluctuation Changes frequently Revised periodically Directly affects buyer-seller agreements Impact on Transactions Affects registration costs

  6. Why is the Difference Important? If Market Value > Guideline Value, buyers may have to pay additional stamp duty if the property is registered at market price. If Market Value < Guideline Value, sellers may find it hard to justify a lower selling price, leading to higher tax burdens. A large gap between the two can lead to black money transactions in real estate.

  7. Conclusion Understanding Market Value and Guideline Value is essential for property buyers, sellers, and investors. Always compare both values before making a purchase decision to ensure transparency, avoid legal issues, and make the most cost-effective deal.

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