BENGALURU: The govt will soon launch a three-month drive to issue B khatas for unauthorised properties in urban areas outside Bengaluru, a move that will bring more urban properties under taxation and possibly net the govt an additional Rs 3,500 crore. Bengaluru city already has a B khata system for unauthorised properties. The new initiative aims to regularise properties in the rest of the state.
Khatas are official registers maintained by local bodies to collect property tax. Properties that are authorised are handed A khatas, with owners receiving a document certifying the property’s legitimacy. But unauthorised properties have long remained outside the tax system.
Successive govts have tried to regularise unauthorised properties in Bengaluru — through the Akrama-Sakrama scheme for instance — but have run into legal hurdles. A temporary B khata was introduced in Bruhat Bengaluru Mahanagara Palike (BBMP) limits last Feb and the govt, following a recommendation by a cabinet sub-committee, intends to extend this policy to the rest of the state.
Of 55 lakh urban properties in the state (excluding Bengaluru), only 22 lakh have A khatas with the process of converting these into e-khatas underway. The state plans to issue B khatas to the remaining properties, which could potentially raise an additional Rs 3,500 crore in property tax revenue. Total property tax collected by 302 urban local bodies (ULBs) currently stands at a mere Rs 1,500 crore.
“The idea is to raise revenue for ULBs so that they can build better infrastructure and civic amenities,” said forest minister B Eshwar Khandre, who chaired the cabinet sub-committee. “It would make ULBs self-reliant and ease the burden on the govt to fund them. It also aims at better regulation in the urban areas.”
ULBs rely on two main sources of revenue — property tax and govt grants but due to delays in elections, ULBs have missed out on central govt grants worth Rs 2,800 crore. ULBs generally struggle to generate revenue, especially from unauthorised properties. For instance, Mysuru City Corporation collected only Rs 190 crore in property tax in 2023-24 against a target of Rs 320 crore.
“We have directed deputy commissioners of all districts to issue B khatas to properties which don’t have an e-khata and collect pending property tax on a one-time settlement basis,” said revenue minister Krishna Byre Gowda. “We’ve set a three-month deadline from Feb 10 to complete the task.”
While real estate houses have welcomed the move, they have urged the govt to ensure tax collected is used to develop infrastructure. “The onus will now be on the govt to ensure proper facilities in ULB layouts,” said Bhaskar Nagendrappa, president-elect, CREDAI-Karnataka. “The govt should also ensure regularisation of unauthorised properties and hold elections quickly so ULBs can obtain central grants.”
