How to calculate government valuation of property?

Property valuation is important to ascertain the value of your property in current times. Let’s say you are planning to sell your property, how would you know the actual value your property holds in the eyes of Government authorities? Well you can know the govt valuation of land by ascertaining the guidance value or circle rates in your area. I will take up an example to help you understand all of it simply. Read through carefully.

I will share the example from my own state Karnataka with you to understand govt valuation of land. Here you go:

1. Go to Kaveri Online Services official website given below:

2. If you will scroll down, you will see an option saying ‘know your property valuation’ just click on it

3. Here you can do a basic search and an advanced search. I personally would recommend you to go for the second option.

4. Enter details such as districts, registration district, SRO Office, Area Name, property usage type, total area and measurement unit.

5. Hit ‘Display Valuation’

6. The guidance value or government valuation of your property will display on your screen.

This is how to know govt valuation of land.

You can find the land valuation of your state on the land revenue website of the respective state.

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When I had to calculate government value of land I opted for the offline method because I wanted very accurate data. To get an accurate government valuation of property, you can contact the local sub-registrar office. However, you can also use online tools such as the e-stamp duty calculator or government land value calculator to calculate the government valuation of property. Let me tell you more about it.

How to calculate government value of property?

To calculate the government valuation of property in India, you can use the following formula:

Government valuation of property = Ready reckoner value * Area of the property * Depreciation (if applicable)

• Ready reckoner value: The ready reckoner value is a government-determined value of a property per square foot. It is based on factors such as the location, type of property, and age of the property.

• Area of the property: The area of the property is measured in square feet.

• Depreciation (if applicable): Depreciation is a deduction in the value of a property due to its age. The depreciation rate is typically 2% per year for residential properties and 5% per year for commercial properties.

Here is an example of how to check government valuation of property:

Ready reckoner value: Rs. 5,000 per square foot

Area of the property: 2,000 square feet

Age of the property: 10 years

Depreciation rate: 2% per year

Government valuation of property: 5,000 * 2,000 * (1 - 0.02 * 10) = Rs. 9,20,000

Calculating the precise value of a property is crucial when purchasing one since stamp duty and registration fees are applied to the higher of the parties' agreed-upon consideration price or the value of the property (as determined by government ready reckoner rates). I realised this when I was in the process of selling my plot. I wasn’t very well aware of govt value of land, so I asked a friend of mine and this is what he told me.

Factors in Government land valuation Calculation

Although, Mr Shiv has already explained a few factors which determine govt land value, I will explain a few more factors with some more details. The following factors must be taken into account when determining the property's value:

1. Government Ready-Reckoner Rate: Getting the government ready-reckoner rate will be the first step in valuing the property. These prices can also be found on the Maharashtra government's official website.

2. Built-up Area: The tariffs listed in the Government Ready-Reckoner apply to developed regions only. As a result, while determining the property's value, the built-up area must be taken into account. It is crucial to determine the built-up area using the following calculation in the event that it is not specified in the Deed/Index II:

   ‘Built-up Area = Carpet Area x 1.2’

1. The floor on which property is situated: Finding the specific floor on which the property is located is crucial since, when determining the valuation, it is necessary to take into account the "Raise" component in the ready-reckoner rate according to the floor of the building where the abovementioned property is placed. The floor is often indicated in the Deed/Index II. 

2. Depreciation: When determining the value of properties older than 02 years, the appropriate percentage of the ready reckoner value must be subtracted. The Occupancy Certificate or Completion Certificate issued by the relevant Government Office shall be taken into consideration when establishing the age of the property. If the aforementioned Certificates are not available, additional data, such as the date of the electricity connection, etc., can be examined. 

3. Parking Area: When determining the value of the house, parking is another crucial factor. The property assessment must account for the parking space assigned to the apartment. For covered parking, the area must be multiplied by 25% of the ready reckoner value, and for open parking, the area must be multiplied by 40% of the ready reckoner value (for land).

4. Terrace Area: The Terrace area assigned together with the flat must also be taken into account when determining the property's value. If the terrace is next to the flat, the area must be multiplied by 40% of the ready reckoner value, and if the terrace is above the relevant flat, the area must be multiplied by 25% of the ready reckoner value.

5. Garden Area: If there are any rights to use the ground floor or stilt floor adjacent to the apartment for parking, gardening, or other purposes, they must be valued at 40% of the ready reckoner value times the area.

An example of how to calculate the govt valuation of property is as follows:

Description of the Property:

Ready Reckoner Rates for the above property:

1. Open Land – 24,580/- per Square Metre.

2. Residential – 78,630/- per Square Metre.

The calculation of govt value of land is as follows:

First, depreciate the Ready Reckoner value by applying the formula: (Ready Reckoner Rate x Depreciation %) x Raise as per floor = (78630 x (70/100)) x 105/100 = 57,793.05

For the flat, we received a value of 57,793.05 per square metre. 

Next, determine the flat's value by multiplying the value from paragraph A above by the area of the flat: 57793.05 x 83.61 = 48,32,076.91

Open Parking valuation: Parking area x (value determined in the preceding paragraph x parking percentage) = 9.29 x (24580 x 40/100) = 9.29 x 9832 = 91,339.28

Terrace valuation: Terrace area multiplied by the value determined in the previous paragraph and the terrace percentage (18.58 x (57793.05 x 40/100) = 18.58 x 23117.22 = 4,29,517.94)

Total Property Value = B + C + D = 48,32,076.91, 91,339.28, and 4,29,517.94, for a total of 53,52,934.13

I hope now you too understand govt value of land calculation and factors very well.

My uncle bought a 2bhk house at a high cost and everything seemed normal to him then. However when my father visited his house, he asked for its price and was totally shocked. He was sure that such a property should not have been bought at the rate my uncle mentioned so asked some neighbours about what is the cost of 1acre land in that area, and after much discussion with several people, it was seen that my uncle was actually somewhat scammed. He had given Rs 58 Lacs for that house which actually should have been within Rs 48 Lacs. He also had not done

govt valuation of land which was indeed a great mistake on his behalf.

There are several factors which should be focused upon before buying a property like

• Obtain Government reckoner rate

• Calculate the built-up area

• Know about the floor of the property

• Age of property

• Parking area, Terrace area, Garden area and more is to be calculated

Considering these factors, the govt value of property is recognised. 

I would say that the best way to know land value is to ask neighbours. You can anytime visit the state’s official land valuation website and know but knowing it from several people is far better as we did. However do remember that not all plots are going to have the same rate. For example if your land is near the main road, has facilities near it, then the price is going to be higher than a plot which is far from the main road or lacks facilities, it is bound to cost less.

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