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The Bangalore Development Authority (BDA) is considering changes to its penalty regime for vacant residential sites after acknowledging that the existing flat penalty has not achieved its intended results. Under the current policy, allottees have been subject to a uniform penalty equivalent to 10 % of the prevailing guidance value for land that remains undeveloped, yet compliance has been low as many plot holders have neither paid the levy nor begun construction. At a recent governing council meeting, officials discussed replacing the flat rate with a graded structure tied to plot size and construction timelines, with lower rates for smaller plots and early development. The aim is to encourage allottees to build on their land and reduce speculative holding, addressing concerns about idle sites that attract encroachment and other issues across the city's layouts.
The Bangalore Development Authority (BDA) is planning to revise its penalty framework for residential sites left vacant after allocation, acknowledging that the current one-size-fits-all approach has not produced the desired outcome. Under the existing rule, allottees of BDA layouts who have failed to develop their plots have faced a penalty of 10 % of the prevailing guidance value of the land. However, this flat-rate system has not spurred widespread compliance, with many beneficiaries ignoring notices and continuing to leave sites undeveloped. Advertisement
At a recent governing council meeting, BDA officials discussed moving towards a graded penalty structure that would vary based on the size of the site and the period within which construction has commenced. The revised approach may allow plot holders who build within five years of allotment to pay reduced penalties, instead of the uniform 10 % charge. Smaller plots, for example, could attract rates of around 2.5 % for 20-30 sites and around 5 % for 30-40 sites, while larger sites might continue to face higher levies closer to the existing level. Authorities indicated that guidance values at the time of construction, along with interest, could also be factored into penalty calculations.
Officials said that the deficiency in the earlier policy has highlighted the need to distinguish between speculative investors and genuine allottees intending to construct homes. Preventing hoarding of residential plots remains a central objective of the authority. BDA developed layouts with basic infrastructure after acquiring land from farmers, with the intention of meeting housing demand in Bengaluru. Despite this, a substantial number of sites have remained idle for years. Some have been tied up in litigation, while others have become dumping grounds or attracted encroachment and anti-social activity, posing challenges for local administration.
According to BDA estimates, nearly 68,000 residential sites across 64 layouts in Bengaluru remain vacant, with more than 20,000 of these involved in legal disputes. Except for more recently developed schemes such as the Nadaprabhu Kempegowda Layout or Arkavathy Layout, vacant plots are found across most major BDA layouts, including Jayanagar, Banashankari, Anjanapura and others. The proposed graded penalty mechanism is intended to provide a more practical and equitable framework that encourages timely development and discourages long-term land hoarding in the city's residential landscape.
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