The Bruhat Bengaluru Mahanagara Palike (BBMP) has announced a rollback in the proposed parking tax for residential properties, a move widely seen as an attempt to quell unrest over perceived unfair taxation policies.
The civic body confirmed on Monday that it would revise the rates following consultations with citizen groups and resident welfare associations. The civic administration had earlier proposed levying parking tax based on a Unit Area Value (UAV) framework, pegging residential parking spaces at ₹2 per square foot and commercial parking at ₹3 per square foot. The formula, meant to standardise and enhance parking-related revenue, drew sharp criticism for disproportionately burdening homeowners while offering large-scale relief to commercial real estate entities.
Residents accused the BBMP of seeking to shift the fiscal weight of tax reforms onto middle-class households, effectively offsetting decades of under-taxation in commercial zones. Associations argued that the proposed revision would lead to a net increase in tax for homes that had previously paid nominal rates, while commercial establishments like shopping malls and office complexes would see a significant reduction in their tax liabilities. According to civic officials, commercial properties had been paying parking tax at a rate of ₹7 per square foot, whereas residential rates averaged around ₹2.10 per square foot. However, the previous tax regime included considerable flexibility and exemptions, with many residential units effectively paying far less than the official rates, especially if adequate parking was already provided on-site.
In response to widespread backlash, senior civic officials clarified that the parking tax component had been a part of the city’s property tax framework since 2008, albeit loosely enforced. Those providing dedicated parking had previously been assessed at only 50% of the full property tax rate. The proposed revision, they claimed, was meant to simplify and rationalise taxation, not penalise compliance. Despite the explanation, residents have urged the civic body to waive the parking tax altogether for properties that offer sufficient in-house parking. They argued that taxing compliant households would discourage the development of proper parking facilities and encourage unregulated street parking, exacerbating traffic congestion and undermining sustainability goals.
In a city already grappling with haphazard urbanisation and a severe dearth of public parking infrastructure, the policy sparked fears of deepening inequity. Urban policy observers noted that incentivising high-density residential developments with sustainable transport integration would be more effective than burdening households retroactively with taxes. Officials from the state government acknowledged the discontent and have hinted at a revised approach. A final decision is expected soon, with an official announcement likely to be made by senior leadership in the coming days. Civic authorities have stated that the revised structure will ensure lower parking taxes for both residential and commercial categories compared to current levels, though the exact figures remain under deliberation.
The episode has reignited debate around Bengaluru’s opaque tax policies and the broader question of how cities can finance sustainable infrastructure while maintaining equity. Urban planning experts argue that city governance must evolve from extractive revenue models to more participatory frameworks that prioritise inclusiveness and climate-conscious urban growth. Bengaluru’s experience underscores the urgent need for clarity, fairness, and forward-looking policies in urban taxation. Any system designed to support green infrastructure and reduce vehicular clutter must align with the city’s stated goals of carbon neutrality, inclusive mobility, and equitable urban living.
As the BBMP reassesses its tax framework, the outcome will serve as a litmus test for how Indian cities can manage the difficult balance between revenue generation and citizen trust. Whether the revised policy fosters behavioural change and urban sustainability — or simply delays a more fundamental reckoning — remains to be seen.
Bengaluru civic body to cut residential parking tax
