BENGALURU: The Bangalore Development Authority (BDA) is considering a reduction in penalties for allottees who have left their residential plots vacant for years. This decision comes after the authority recognized that the current flat-rate penalty system has not been effective. During a recent governing council meeting, officials acknowledged that the existing 10% penalty, linked to market values, has failed to incentivize site owners to either pay or begin construction. Many beneficiaries have ignored demand notices, prompting the BDA to explore a more practical and graded penalty structure.
Under the proposed changes, beneficiaries who build homes within five years of receiving their plots may qualify for reduced penalties instead of the uniform 10% charge. Penalty rates are expected to depend on plot size, with smaller plots attracting lower penalties. For example, a 20×30 plot may incur a penalty of around 2.5%, a 30×40 plot about 5%, a 40×60 plot approximately 7.5%, and larger 50×80 plots could still be subject to a 10% fee. The calculations may also consider the guidance values at the time of construction, along with applicable interest.
A similar 10% penalty was introduced in September 2024 for allottees with full ownership rights; however, compliance has been minimal. This lack of response has highlighted the need for a more nuanced approach that differentiates between speculative investors and genuine allottees looking to build homes.
Combating the hoarding of residential plots remains a top priority for the authority. The BDA has acquired land from farmers, developed layouts with essential infrastructure, and allocated sites at subsidized rates to meet the city’s housing demands. Nevertheless, some beneficiaries treat these plots merely as long-term investments, leaving them vacant for many years. Such sites often become dumping grounds, attract encroachments and anti-social activities, and create law-and-order issues.
According to BDA estimates, approximately 68,000 sites across 64 layouts in Bengaluru are vacant, with over 20,000 embroiled in legal disputes. Vacant plots are present in nearly all major BDA layouts, including Jayanagar, Banashankari, Anjanapura, HAL, HBR Layout, JP Nagar, Nagarabhavi, Koramangala, and Indiranagar, apart from the newly developed Nadaprabhu Kempegowda Layout and Arkavathy Layout. While construction deadlines have been extended from two years to three and now to five years, enforcement has varied. Although the law allows for the resumption of plots after deducting 12.5% of the allotment amount, violations often surface only during the regularization or sale process, officials noted.
