Key Takeaways
What Is FAR and Why Is It Important in Real Estate?
FAR stands for Floor Area Ratio. It is the single number that determines how much a developer can build on a given plot of land. The calculation is straightforward: total built-up area across all floors divided by the total plot area. A plot of 1,000 sq. mt. with an FAR of 2 allows 2,000 sq. mt. of construction. Double the FAR, and you can build twice as much on the same land.
FAR directly controls building height, density, and how many homes a developer can offer on a project site. Low FAR limits produce low-rise projects with fewer units. Higher FAR enables taller towers, more homes per acre, and — in theory — more supply entering the market. The FAR rules for buildings in Bengaluru have historically been among the more restrictive in India's major cities.
What Has Changed in Karnataka's New FAR Policy?
Two distinct developments have taken place simultaneously, each targeting different zones of the city.
The first is the Premium FAR Policy, gazetted on 21 February 2025 under Gazette Notification No. UDD 78 MNJ 2024 (E). This amendment to the Zonal Regulations of the Revised Master Plan 2015 for Bengaluru allows any developer to acquire extra built-up area — over and above the allowable FAR of their project — by paying a premium to the concerned authority. The premium on FAR will not exceed 40% of the allowable permissible FAR of the project. An additional 20% FAR is also made available through TDR (Transfer of Development Rights). Road width determines the premium entitlement: if the road width is above 18 metres, 60% FAR will be provided; if it is above 12 metres but below 18 metres, 40% FAR will be made available.
The second development relates to KIADB (Karnataka Industrial Areas Development Board) zones. In February 2026, the state government modified building regulations in KIADB zones, raising the permissible FAR to 5.2 through premiums — up from a previous ceiling of approximately 3.25. Bengaluru Urban, Bengaluru Rural, and other surrounding districts fall under this category.
In Conclusion
The relaxation of Karnataka FAR regulations presents a genuine opportunity for increased housing availability in Bengaluru, especially within growth corridors where limited land resources have been driving up costs. The Premium FAR Policy and the KIADB zone revision together represent the most substantive rewrite of building density rules the city has seen in over a decade. Whether these policy changes deliver meaningful benefits for homebuyers ultimately depends on two variables: how quickly infrastructure improvements can keep pace with the additional density being approved, and whether the surplus FAR results in enhanced product quality from developers or merely increased unit volume. Buyers approaching the market during this period of transition should focus on established developers with a proven track record in high-density delivery, verify RERA compliance, and assess road width and civic infrastructure in any project's immediate catchment before making a commitment.