Karnataka Chief Minister D K Shivakumar announced on Tuesday that the state government will frame rules to double the Floor Area Ratio (FAR) in tier-II and tier-III cities across the state. The move aims to boost urban development and provide more flexibility for real estate projects outside Bengaluru.
Mechanism and Premium Charge
The new mechanism will allow developers and property owners in Bengaluru to legally purchase built-up space up to 40 per cent to 60 per cent over the base limit by paying a premium charge based on the guidance value. This is expected to encourage higher-density construction and optimize land use in growing urban centers.
Speaking at a press conference in Kalaburgi, CM Shivakumar said, “We are committed to balanced regional development. Doubling FAR in tier-II and III cities will attract investment and create housing opportunities.” He added that the rules would be finalized after stakeholder consultations.
Impact on Real Estate Sector
The decision is part of the government’s broader strategy to decongest Bengaluru and promote growth in other cities such as Mysuru, Hubballi-Dharwad, Mangaluru, and Kalaburgi. Industry experts believe this will lead to increased construction activity and potentially lower property prices in these regions.
According to a senior official from the Karnataka Urban Development Department, the premium charge will be calculated as a percentage of the guidance value of the land, ensuring revenue generation for the state. The exact percentage is yet to be determined.
Background and Previous Policies
Currently, FAR in tier-II and III cities ranges from 1.0 to 1.5, depending on the zone. The doubling would raise it to 2.0 to 3.0, aligning with norms in some metro cities. Bengaluru already has a premium FAR scheme allowing up to 4.0 in certain areas.
Real estate developers have welcomed the announcement. “This will unlock potential in smaller cities and reduce pressure on Bengaluru’s infrastructure,” said a representative of the Karnataka Real Estate Developers Association.
