Pay 40% of guidance value to build extra floors

Bengaluru: The state government has introduced draft rules allowing additional floors to be constructed for a
premium. 

The Urban Development Department published the draft rules on March 16. The rules — expected to be published in the official gazette after the Lok Sabha elections — will help big builders and small-plot owners construct an additional 40% of built-up space. The beneficiary will have to pay 40% of the guidance value. 

The Karnataka Planning Authorities (Amendment) Rules, 2024, will be applicable across Karnataka, including Bengaluru. 

The zonal regulations of the approved master plan will form the basis for allowing the premium Floor Area Ratio (FAR). This means any FAR beyond the permissible limits will not be allowed along narrow roads. Wherever allowed, the number of additional floors will be determined by the plot size. 

For example, two extra floors (of 500 square metres each) can be built on a 1,000-square metre plot with a guidance value of Rs 50,000 per metre provided the builder or property owner pays Rs 2 crore as premium FAR charges. 

D Vishnuvardhana Reddy, a former member of the Karnataka Real Estate Regulatory Authority (RERA), said the planning authority and the local body should notify the maximum permissible premium FAR in each area, with the other applicable conditions, to ensure transparency in the whole process. 

“The success of the whole scheme will depend on the difference between the land’s guidance value and market value. The greater the difference, the higher the incentive,” he said. 

He noted that the draft rules would positively impact the redevelopment of old projects if the guidance values stay unchanged in the next few years. 

“If the government permits 100% premium FAR in redevelopment projects, there would be some fillip to take up redevelopment, and a value proposition can emerge to convince the owners of old buildings,” Reddy said. 

Separate account

The charges collected from premium FAR will have to be deposited in a separate head of account only for land acquisition or development of public infrastructure. 

“The funds shall not be utilised for repairs, maintenance and miscellaneous works at any time,” as per the rules. 

The government has also asked the planning authority (Bangalore Development Authority, for example) or the local urban body such as the BBMP to develop an app to issue and manage premium FAR in electronic form along with the original record. 

However, the draft rules make no mention of the Transferable Development Rights (TDR), which are currently used for building additional floors. The government issues TDR to acquire private properties for public projects.