Premium FAR Policy Rolled Out by the Government of Karnataka

On 21st February 2025, the Karnataka government rolled out the policy for premium Floor Area Ratio (“FAR”) norms, which was released for public scrutiny on 4th January 2025, and has amended certain regulations for the premium FAR zonal regulations of the revised master plan 2015 for Bangalore, which will enable the builders to increase the floor by paying 28% percent of the circle rate. Aimed at accelerating urban development, the policy offers developers an opportunity to purchase additional FAR based on the road width:

• As per the gazetted notification, a new chapter titled “Premium F.A.R. Granted by Levy of Premium Charges” has been added after Chapter 10 within the Zonal Regulations of the approved “Revised Master Plan–2015” applicable to the Local Planning Area of Bengaluru. These revised premium-FAR-norms are governed under Section 15 of the Karnataka Town and Country Planning Act, 1961 (“Act”).
• This policy change applies to the areas under the jurisdiction of the Bangalore Development Authority (“BDA”), Bengaluru-Mysuru Infrastructure Corridor Area Planning Authority (“BMICPA”), Anekal, Kanakapura, Ramanagara, Channapatna, Magadi, Nelamangala, Bengaluru International Airport Area, and Hoskote. Bangalore Metropolitan Region Development Authority (“BMRDA”) and Bangalore Development Authority (“BDA”), and the other local authorities are responsible for issuing additional FAR to Premium FAR.
• The provision for granting Premium FAR applies to properties on roads with a minimum width of 9 meters. The policy on premium FAR allows the purchase of additional FAR based on the width of the adjoining road, incentivising the high-density development in urban areas. As per the revised Premium FAR norms, for the roads between 20 to 40 feet in width, a Premium FAR of 20% is permitted, while the roads between 40 to 60% will allow a Premium FAR of 40%. For the roads which are wider than 60 feet, a Premium FAR can reach up to 60%.
• Under the newly introduced policy, the cost of the additional FAR is calculated based on the Guidance Value of the developed property and the notional site area required for the intended additional construction. For the properties situated along roads with a width exceeding 30 feet, the government has proposed a Premium FAR rate equivalent to 50% of the property’s guidance value, contrasting with the previous 40% threshold proposed in the now-withdrawn Karnataka Town and Country Planning (“Amendment”) Bill, 2023. However, the minimum premium charge cannot be less than 28% of the Guidance Value per square metre.

Under this framework, the Premium FAR cannot exceed 40% of the total permissible FAR of a property. If developers seek additional FAR beyond this, they are required to obtain additional FAR through Transferable Development Rights (“TDR”), which is restricted to a maximum of 20% of the allowable FAR