What Is The Market Value (Or Guidance Value) Of The Land?

What is the land’s current market value?

The estimate worth of the land according to the records kept by the relevant state government is known as the market value of land or the guideline value of a property. The minimal price at which the sale of a property can be recorded with the state government is known as circle rate in various jurisdictions. Each state’s Department of Stamps and Registration is responsible for keeping track of these data and for annually publishing the market value of the land for each property or its guideline value.

The guideline value serves as the land’s ready reckoner value. The market value reported by the Department of Stamps and Registration is dependent on a number of variables and changes from year to year as well as from area to locality. Even among various structures in the same location, it may differ.

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Market-Value Influencing Factors for Land

Find a few key elements that significantly influence a land parcel’s market value below.

  • Age of the Property: The market value of a property is influence by both its age and the age of the structure it is housed in. A newly constructed property often has a higher market value than an older one.
  • Property’s Location: Determining the market value of a property depends heavily on its location. Even a little portion of a land parcel created in an upscale neighbourhood has a higher market value than a sizable land parcel established in an undeveloped location.
  • Construction Quality: The market value of the land is also impacted by the construction quality. Apartments constructed using premium-grade materials are often more expensive than those constructed with items of lower quality. Even if the properties are identical in age, this still holds true.


How Can I Determine the Market Value of Land?

In India, especially in metropolitan areas, the cost of real estate is always rising. The market value of land is determin by taking a number of things into account. The location, size, form, level, and laws related to the land are the determining variables. You should utilise a comparable approach to determine or estimate the market value of land.

Let’s examine in depth the many approaches to determining the market value of land:

  • The most popular technique for determining a property’s market value is belting. The property is split into three belts using this approach, with the belt nearest to the main road receiving the highest value. The second belt receiving a price equal to two thirds of the first belt’s price, and the third belt receiving a price equal to half of the first belt’s value.
  • Procedure for Valuing Land and Buildings: In this method, the values of the two are assessed independently. The two numbers are then combined together after taking into consideration a variety of variables in the calculation of the values.
  • The value of comparable properties in the same area is estimated using the comparative property valuation technique, sometimes referred to as the sales comparison approach. The price of a property may vary depending on its size, orientation, legal status, and interiors.
  • Development Method: In this approach, the cost is determin after accounting for the area’s potential for development. Better purchasing judgements may be made using this strategy.
  • The government determines the minimum worth of a piece of property using the guidance value method. This approach involves calculating market value after taking into account the guiding value, which is occasionally referre to as circular rate. It is considere unlawful to purchase a property for less than the recommended value.


Does land’s market value or suggested value improve every time?

One of the most lucrative sources of money for a state government is guidance values. That does not guarantee that the market value will always increase, though. A change in the guideline value will immediately and directly affect how much a property is worth. A rise in the guiding value will result in an increase in the property’s market value. While a fall in the guidance value will result in a loss in the property’s market value. Having stated that, the guiding levels are not chosen at random or only base on market demand; It is based on research and analysis of several elements, including things like how a place is developing.

The Department of Stamps and Registration makes an effort to keep a property’s circle rate as near to practicable to the going market rate. Since property taxes make up a sizable portion of a state government’s revenue. It is important to avoid any cash and illicit money transactions that could have an impact on state exchequer earnings. Some state governments have previously requested that their metropolitan boards or corporations calculate property taxes using market values rather than “unit area” measurements.


Various expressions for the market value of land

Although “Guidance Value” is a phrase that is familiar to and frequently use. Other names are also use to refer to the same value. The words “Market Value of Land,” “Guideline Value.” “Ready Reckoner Rate,” or “RR Rate.” Which are mostly use in Maharashtra, and “Circle Rate.” Which are use in North India. Particularly in important cities like Delhi and Noida. Are some of the alternatives to “Guidance Value.”



  • The Market Value denotes the lowest price at which a property in a particular location should be sold since it is base on research conducte by the state government and is essentially scientific in nature. The Guidance Value is the lowest sum for which a property may be registere in a certain location; as a result, the property will not be sold for less than the Market Value. This ensures that the seller will receive a minimum selling price.
  • Even if a person purchases a property for less than the state government’s guidance value. They are still requireto register it at the government’s determin market value and pay property tax base on that value.
  • On the other hand, if the buyer paid more for the property than the state government’s established Market Worth. They must register it at its true value and pay taxes equal to the amount they paid for it.
  • Don’t be shocke if a person from another state is unable to grasp the language you use to refer to the Guidance Value of a property because the terminology use varies from state to state.
  • In a locality, Guidance Values are applicable to all different types of properties. The property might be a parcel of land use for farming, an apartment in a building housing several people. A standalone villa, a planned community, and so on.
  • The guidance values for a property will vary depending on its level of development. A property located in a well-develope neighbourhood will have a greater Guidance Value than a property located in a neighbourhood that is underdevelope or just beginning to develop.
  • While market values are establish by state governments base on research and other factors. A seller has the full freedom to sell a property at the price he chooses. A buyer cannot force a property owner to sell at the Government-set Guidance Value.
  • A state government’s revenue depends on guidance value since it determines the stamp duty, registration fees. And property tax that must be paid on a property.


A Case Study

Arun wants to purchase a home in Bangalore’s JP Nagar 8th Phase. Assume that the property in question is located in a neighbourhood that is just beginning to develop. That the market value of properties there is currently running at Rs. 6,500 per square foot. Though this price is negotiable, and that the Guidance Value established by BBMP at that neighbourhood is Rs. 5,000 per square foot. According to the legislation. Arun must register the property at the market pricing agreed upon and not the Guidance Value of the property in order to prevent profiteering with illicit money. i.e.  Arun will register the property for an amount between Rs. 5,000 and Rs. 6,500 per sq. ft.

On the other hand, if Arun paid Rs 4,000 per square foot for the property when the Guidance Value was Rs 5,000 per square foot. Then Arun must register the property for Rs 5,000 per square foot. And not at Rs 4,000 per square foot since the minimum selling price as indicated in the Guidance Value of properties in that locality was Rs 5,000 sq. ft. This will stop anyone from making money off of black market methods and stop any state government losses brought on by undervaluing the property.

Therefore, the guide value or market value of land aids in determining a person’s property’s worth and. Consequently, the purchase and sell price of that property.






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Disclaimer: The views of this expressed above are for informational purposes only based on the industry reports & related news stories. Navimumbaihouses.com does not guarantee the accuracy of this article, completeness, or reliability of the information & shall not be held responsible for any action taken based on the published information.
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