The Karnataka government on July 31 issued an ordinance to encourage vertical growth in the state by allowing civic agencies to impose up to 33% premium for higher Floor Area Ratio (FAR). This is expected to bring in more revenue to the government.
The ordinance, an amendment to the Karnataka Town and Country Planning (KTCP) Act, provides civic agencies and government leeway to charge a premium rate of no more than one-third the guidance value for every approval to increase one Floor Area Ratio (FAR) on properties.
Additional Chief Secretary for urban development department Rakesh Singh said: “The premium FAR is FAR that can be bought.” Singh said the government is framing rules and regulations about where these premium FARs can be bought and who can buy them. “Premium FARs can be purchased primarily along mass rapid transport corridors, which include Namma Metro lines and Peripheral Ring Road,” he added.
Premium FAR regulations will benefit large plots
The primary reason is to boost high-rise development along Namma Metro lines in Bengaluru. However, other regulations under the KTCP Act, including setbacks, will continue to be the same.
This effectively means bigger plots and larger development of properties by builders will benefit by premium FAR regulations.
The scheme is in force across Mangalore Municipal Corporation where every additional FAR is available at 50% of guidance value. Once a common scheme is introduced, this corporation could lose some revenue.
Builders welcomed the decision to allow higher FAR, but found the 33% premium unaffordable. Suresh Hari, Chairman of Bengaluru chapter of Credai (Confederation of Real Estate Developers’ Associations of India), told TOI: “The government cannot consider premium FAR as a monetizing scheme. (Premium of) one-third of the guidance value is not affordable as developers have to consider the bottom line on projects. With the land parcels shrinking within the city, the government should consider it more as a policy than a revenue-generation mechanism.”
Source: TNN, Bengaluru