If you’ve been trying to buy or sell property in Karnataka recently, you’ve probably noticed a slowdown in transactions.
And if you’re wondering why, the answer lies in the mandatory e-khata requirement and some unexpected technical roadblocks.
Revenue Targets vs. Reality
The Karnataka stamps and registration department had set an ambitious revenue target of Rs. 26,000 crore for the financial year 2024-25.
However, as of February 28, they had collected Rs. 20,186 crore—leaving a daunting Rs. 5,800 crore to be generated in just one month.
While sluggish real estate transactions have played a role in this shortfall, officials are pointing fingers at technical glitches in generating encumbrance certificates (ECs) and the new e-khata mandate, both of which have significantly slowed property registrations.
Bengaluru: The Revenue Powerhouse
Bengaluru Urban continues to be the largest contributor, raking in over Rs. 13,000 crore.
Bengaluru Rural followed with over Rs. 1,200 crore, while the rest of the state chipped in with Rs. 5,000 crore.
But with the financial year closing in, officials are scrambling to boost revenue inflow.
Looking at past trends, Karnataka had collected Rs. 17,491 crore by February-end in 2023-24, meaning this year’s numbers are technically ahead by Rs. 2,500 crore.
However, March collections last year were just Rs. 2,800 crore, and if history repeats itself, the state might fall short of its revenue goal once again.
The Impact of E-Khata on Property Registrations
The mandatory e-khata requirement, implemented in October 2024 to prevent illegal registrations, has particularly affected Bengaluru.
In a recent budget session, BJP MLA Vedavyas Kamath raised concerns about a decline in property registrations due to this mandate.
Revenue Minister Krishna Byre Gowda, however, reassured that while illegal transactions have reduced, legitimate registrations haven’t impacted the government’s revenue.
But the numbers tell a different story.
Before e-khata became mandatory, the state collected Rs. 13,811 crore in stamp duty and registration fees between March and September 2024.
However, after the rule came into effect (October 2024 to February 2025), collections dipped to Rs. 6,375 crore—a clear sign that the new requirement has slowed down transactions.
Bengaluru Rural: The Silver Lining
Despite these challenges, Bengaluru Rural remains a strong player in property transactions.
The district has consistently contributed over Rs. 1,000 crore annually since 2022-23, and by February this year, it had already crossed Rs. 1,200 crore.
According to a realtor, the demand for agricultural land in Bengaluru Rural has been on the rise.
The 2020 amendment to the Land Reforms Act, which allowed non-agriculturists to buy farmland, has driven up investor interest.
With its proximity to Bengaluru and the international airport, property prices in the region have soared.
What This Means for Buyers and Sellers
If you’re a property buyer in Karnataka, the e-khata mandate means additional paperwork and verification, so be prepared for some delays.
On the flip side, sellers might find transactions taking longer than usual, which could impact negotiations.
For investors, Bengaluru Rural continues to be a hotbed of opportunity, particularly for those looking at agricultural land.
With demand still strong, it’s a matter of when, not if, transactions pick up again.
The Road Ahead
As the state races to meet its revenue targets, the big question remains: Will last-minute registrations help bridge the shortfall?
While March typically sees a surge in transactions, it may not be enough to hit the Rs. 26,000 crore mark.
However, once the initial hiccups of e-khata settle down, Karnataka’s real estate sector is expected to bounce back.
If you’re looking to buy or sell property in Bengaluru or anywhere in Karnataka, Proptals is here to guide you through the evolving real estate landscape.
Stay informed, stay prepared, and let’s navigate these changes together!