what is guidance value

The guidance value is the minimum selling price of a property that is fixed by the government. It is used to estimate stamp duty, registration fees, and property tax. The guidance value is also known as the guideline value, circle rate, or ready reckoner rate, depending on the state. It is determined based on factors such as the location, amenities, infrastructure, and potential for area development. The market value, on the other hand, is the final price that a homebuyer pays for a property, including amenities and infrastructure. The market rate is typically higher than the guidance value. The government revises the guidance value annually to reduce the gap between the guidance value and the market rate, which helps generate higher revenue through stamp duty and registration fees and curb black money circulation in the real estate sector. Any upward revision in the guidance value results in an increase in the market price of the property.