Karnataka is taking a bold step to tackle its affordable housing crisis by exploring new levies aimed at funding housing for economically weaker sections (EWS) and low-income groups (LIG). The proposed Karnataka Affordable Housing Fund (KAHF) would draw from additional stamp duties on second homes, fees on vacant sites, and premiums on development projects. This move comes as the state grapples with soaring construction costs that have doubled over the past decade, while incomes for EWS have stagnated.
The initiative was discussed during a recent stakeholders' meeting, where officials noted that around 30-35% of housing investments in Bengaluru come from NRIs. This demographic has been targeted for additional stamp duties, reflecting a growing sentiment that local residents should benefit from housing initiatives first. The KAHF aims to create a sustainable financing source, similar to successful models in Maharashtra and Tamil Nadu.
While the proposal is still in its infancy, it has garnered mixed reactions. Builders are cautiously optimistic, provided the measures are beneficial for all parties involved. However, the challenge remains: will these levies deter investment in a city already struggling with affordability, or will they provide the necessary funds to alleviate the housing crisis? The stakes are high, as Bengaluru continues to attract a growing population amid rising living costs.
