Bengaluru: The Karnataka government has approved a regulation to legalise properties that lacked fully compliant ownership records or are unregistered in Bengaluru, a decision that is expected to unlock vast land parcels in the city’s peripheral areas.

The move is projected to free up thousands of acres, curtail illegal land sales and ease an acute land supply shortage plaguing India’s tech capital, developers and industry bodies said. On other hand, some urban planners and civic activists raised concerns about the possibility of misuse of the policy while also warning that many of these sites are in ecologically sensitive areas.

The regulation, passed by the state cabinet and notified this week, will allow properties in 110 village areas that were added to the Bengaluru municipal corporation limits to convert to A-Khata, which certifies that a property is fully compliant with all regulations and has clear ownership titles. These properties previously had B-Khatas.

B-Khata was being issued by BBMP for irregular plots or properties since 2009. The process of issuing. It was stopped on 30th September 2024.”It is learnt that it has been decided that if this B-Khata was issued on the basis of government circulars, it can be considered as A-Khata. Otherwise, it can be considered as a proper Khata and

considered as authentic for legal purposes,” mentioned the changes.

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These properties include revenue sites, gram panchayat-approved layouts and properties with incomplete documentation, many of which have existed in legal limbo for over two decades.Industry insiders said the regulation will unlock a substantial stock of urban land that was previously unutilised due to legal uncertainty, potentially easing the pressure on Bengaluru’s real estate market. It will also curb the rampant sale of unapproved small plots and unauthorised subdivisions, which have long undermined urban planning on the city’s outskirts, they said. Land prices have doubled in the city in the last four years due to a shortage of properties with clear titles.Under the new framework, property owners can apply for regularisation through a self-declaration scheme by paying a one-time penalty and complying with basic conditions. Crucially, once regularised, these properties will be eligible for A-Khata certificates, making them legally recognised and fit for sale, construction and civic services.

According to experts, with more than 1.5 million properties estimated to fall under this scheme, the municipal corporation, Bruhat Bengaluru Mahanagara Palike (BBMP), is expected to receive a major boost in property tax revenue, estimated to be by Rs 1,200-1,500 crore annually.

“This is a win-win. The government earns revenue, the owners get legal recognition, and the city gets a chance to plan better,” said Madhusudhan G, chairman and managing director at real estate developer Sumadhura Group. “It also brings a sense of confidence for institutional investors and banks that were earlier wary of land in peripheral areas.”

The decision comes at a time when Bengaluru is grappling with a shortage of legally clean land parcels for residential and industrial development.
According to developers, many large players had stayed away from B-Khata zones due to lack of title clarity, resulting in reduced supply and surging prices in approved layouts.

“This will partially solve the land crunch we are facing in the market. With title risk removed, the city will see a wider canvas for development,” said Mallanna Sasalu, chief executive – South at real estate firm Puravankara. “We will also see greater compliance going forward. This will stop indiscriminate cutting and selling of plots before the infrastructure catches up,” he said.

Analysts estimate that land prices in regularised areas could rise by 15–25% in the next 12 months, as demand picks up and formal financing becomes accessible to both developers and end buyers.

The new law also seeks to plug the loopholes that enabled unregulated growth in building construction.

Once the regularisation window closes, no new property in the BBMP limits can be sold without a proper Khata or layout approval. Officials said this would discourage fragmented land sales, prevent violations near lakes and drains, and pave the way for stricter planning enforcement.

Urban planners and civic activists said the policy must be carefully implemented to avoid its misuse.

“There are valid fears about over-regularisation. Many of these sites are located in ecologically sensitive areas. If regularised blindly, it could lead to environmental degradation,” said an urban governance researcher.

Legal experts said the state is now acknowledging the de facto urbanisation that has already happened and offering a formal pathway forward. If implemented transparently and tied to robust zoning enforcement, the reform could become a model for other fast-growing Indian cities battling unregulated sprawl.