A variety of ways can be used to determine the Fair Market Value FMV of property in India. You need to ensure that the value arrived at being as accurate as possible.
These are also related to as Circle Rates. It denotes the minimum rate of property that is guided for a particular area. The circle rates are fixed by the local development authority or the state government. It becomes a reference point for estimation of stamp duty and registration charges.
The authorities keep changing the rates periodically to match the changed circumstances. Still, there’s a huge gap in the circle rates and the market rate of real estate in India. Ideally, it should present you an insight into the relative worth of property in several localities. But relying solely on circle rates may put you in a difficult situation. So, it’s better to use the guidance value in conjunction with other methods to arrive at true FMV of property in India.
This method asks for conducting a market analysis in your locality. Look around and ask your friends and neighbors the prices at which they have purchased or sold the property. Another source of knowledge can be the real estate agent or property lawyer. You may consult real estate management lawyer or take legal advice from best property law firm to find out the FMV of property in India which has similar dimensions to yours.
It may give you the approx. FMV of the property in India.
A housing price measures the variations that have taken place in the prices of residential property over time. The popular property indices in India are Residex (maintained by National Housing Bank) & HPI & RPPI (managed by RBI). HPI stands for Housing Price Index & RPPI stands for Residential Property Price Index.
These indices give an idea about the usual pricing trends in various cities. The indices are updated quarterly based on the revenue department’s transaction data. The information by these is undoubtedly reliable. The unique catch is the historicity and limited coverage.
You may get the figures for well-known Indian cities which may or may not include yours. Besides, it might be difficult to get the most recent data to facilitate decision-making.
Registered Property Evaluator
When it’s about real estate valuation, you require a Registered Property Valuer. He is a government-approved professional who provides a range of services. In return for a nominal fee, they evaluate the real worth of the property. They normally consider factors such as dimensions of the property, freehold/leasehold, restrictive covenants (if any), whether insured or not. Based on a standard method, the valuer would give you a valuation report. It’s necessary to retain the valuation report at least for eight successive assessment years after valuation.