Karnataka’s Property Registration Fee Hike: Bengaluru’s Real Estate at a Crossroads in 2025

The Karnataka government has just doubled property registration fees to 2%, and the move is sending ripples through the Bengaluru real estate market. For a city already juggling skyrocketing property prices, unsold inventory, and slowing sales, this fee hike has added another layer of complexity.

If you’ve been eyeing a new home, tracking Indian real estate trends, or simply looking for smart property investment tips, here’s what this shake-up really means for Bengaluru’s housing market in 2025.

Bengaluru Real Estate: Rising Costs, Fading Sentiment

Homebuyers in Bengaluru are feeling the squeeze. Over the last four years, property prices have surged by more than 50%, and now, the new registration fee has pushed transaction costs even higher.

👉 Example: Buying a ₹1 crore flat will now cost you nearly ₹7.5 lakh in stamp duty + registration fees, compared to ₹6.6 lakh earlier.

For families shopping in the ₹40–70 lakh range, this means an extra ₹50,000–₹75,000 out of pocket—a bitter pill, especially since banks don’t finance these charges.

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Affordable Housing Takes the Hit, Luxury Keeps Moving

The pain will be most visible in the mid- and affordable housing segments, where first-time buyers and salaried households are already stretched thin.

Unsold inventory in Bengaluru is up nearly 30% YoY, and the added registration cost is likely to worsen the pile-up.
Many buyers may delay purchases or cancel bookings, directly impacting developers catering to this segment.

On the flip side, the luxury housing segment is still holding ground. Affluent buyers are relatively less bothered by a few extra lakhs in fees. This is why most developers are pivoting toward premium launches, chasing high-net-worth customers who see property as a wealth-creation play.

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New Launches Are Up—But Who’s Buying?

Despite affordability challenges, Bengaluru isn’t slowing down on supply. In the first half of 2025 alone, the city recorded 34,551 new residential launches, a 19% jump YoY.

Projects priced above ₹1 crore have more than doubled.
Demand at the top end remains resilient, while budget-conscious buyers are reworking home-buying plans or deferring purchases.

This mismatch could mean more short-term slowdowns in registrations even as luxury towers continue rising across the city skyline.

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Rentals on the Rise?

With affordability shrinking, many analysts believe more buyers will park themselves in rentals instead of buying.

What this means:

Bengaluru’s already hot rental market could see a spike in demand.
Monthly rents in prime IT corridors may inch even higher.
Some transactions may go underreported as buyers look to sidestep higher fees—a trend India’s real estate regulators will be watching closely.

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The Government’s Side of the Story

Karnataka’s government insists the move is about boosting revenue while keeping fees competitive. Officials point out that even after the hike, Karnataka’s transaction costs are still lower than Kerala or Tamil Nadu.

However, with property tax revenues and stamp duty collections falling short of targets, many in the sector argue that the timing of the hike—when buyer sentiment is already fragile—could slow the market further.

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Final Take: Navigating Bengaluru’s Market in 2025

If you’re planning to buy property in Bengaluru, it’s time to factor in higher transaction costs into your budget.

✔️ Look out for developer-led offers (like flexible payment plans).
✔️ Explore co-borrowing options with banks and housing finance companies.
✔️ Stay informed about policy updates—small changes can make a big difference in your final cost.

At the same time, investors in luxury housing may still find attractive returns, while mid-income buyers will need to tread carefully.

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💡 Bottom line: Bengaluru’s real estate market is at a crossroads—and the decisions buyers, sellers, and policymakers make now will shape how the city grows in the next five years.

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