Homestay Rules in Karnataka: Registration, Fees and the 2025 Guidelines

By Rohan Khanna · India Property & Hill Stations · Reviewed against the 2025 guidelines, September 2026

Karnataka rewrote its homestay rules, and a good many owners are still working from the old ones. The Department of Tourism now registers homestays under the Guidelines for Registration of Homestay Establishments – 2025, published under the Karnataka Tourism Trade (Facilitation and Regulation) Act, 2015 and its 2016 Rules. The guidelines open with a sentence the previous regime never contained: “Registration is compulsory to operate a Homestay in Karnataka.”

That single line changes the calculation for every unregistered plantation stay in Kodagu and every spare-cottage operation in the Malnad. What follows is what the current guidelines actually say, taken from the government order published by the Department of Tourism.

What counts as a homestay now

The definition is narrower and more precise than it was. A homestay is a privately owned residence — including one on a farm or plantation — where the owner, or their spouse or children, is physically residing in the same residence, letting rooms to tourists for payment. The guidelines classify it explicitly as a non-commercial activity, which is the hinge on which the tax and utility treatment turns.

Two details matter more than they look. The rooms need not be inside the house the family sleeps in: they may sit in a separate building or cottage on the same plot — the same survey number. That legitimises the cottage-in-the-coffee-estate arrangement common across Kodagu and Chikmagalur. And an owner of several houses may register only the one they live in. A rented, leased or sub-let residence cannot be registered as a homestay at all.

Homestay or bed & breakfast — a new fork in the road

The 2025 guidelines introduce a distinction the old scheme did not draw. If the owner does not live on the premises but an agent or operator they appoint does, the establishment is a bed & breakfast, not a homestay — and a B&B is defined as a commercial activity. The room and bed limits are the same. The consequences are not: the domestic-rate treatment described below attaches to homestays because they are non-commercial.

The department says separate guidelines for bed & breakfast establishments will be issued. At the time of writing they had not appeared. Owners who let a property they do not live in are, on the face of the guidelines, outside the homestay framework entirely.

How registration works

The application goes online to the Deputy Commissioner of the revenue district, through the Department of Tourism portal — not, as in 2012, to a tourism office in Bengaluru. Until the portal is live, the Assistant or Deputy Director (Tourism) for the district receives applications directly.

What follows is a four-way inspection, and it is more searching than the annual visit our 2012 report described:

Each official files a report to the AD/DD (Tourism), who compiles them for an Approval Committee chaired by the Deputy Commissioner. One procedural protection is worth knowing: an application cannot be rejected at the inspection stage. Deficiencies are reported to the committee, which makes the final decision. Registration then runs for five years, and renewal should be applied for at least three months before expiry.

What it costs — and what no one is allowed to charge you

Here the honest answer is that the guidelines do not print a number. Section 3.5 says only that the application must carry a non-refundable registration or renewal fee “as notified by the Government”, payable online through the portal, or to the District Tourism Development Committee until the gateway is available.

The figures still circulating — Rs 15,000 a year for Gold Atithi and Rs 10,000 for Silver Atithi — come from the scheme this page reported in 2012, and we should say plainly that our own page is one of the places they have been circulating from. Under the 2025 guidelines, registration and grading are separate exercises: the guidelines cover registration only, and state that a “separate classification / grading scheme for facilities and services of Homestays will be provided.” Confirm the current fee with your district AD/DD (Tourism) before paying anyone anything.

Tax, electricity and the luxury-tax line

Until this revision, this page told owners that homestays are exempt from luxury tax. That was accurate when we published it in 2012. It is not a live exemption today, because luxury tax on accommodation ceased to exist as a separate levy when GST subsumed it in July 2017. An owner planning around that sentence is planning around a tax that no longer exists.

What the 2025 guidelines do provide is more valuable. Because a homestay is classified as non-commercial — “an extension of domestic activities” — it pays property tax, electricity, water and other utility charges at domestic rates, with electricity per the Karnataka Electricity Regulatory Commission tariff schedule. And a homestay is not required to obtain a trade licence from the local authority. Both are meaningful savings against being treated as a commercial lodge.

The guidelines are equally clear that the owner remains responsible for statutory payments and tax compliance. On GST, the position as it stands after the 56th GST Council meeting, effective 22 September 2025:

Whether you must register for GST at all is a separate question from the rate. The threshold for service providers is aggregate turnover above Rs 20 lakh in Karnataka. Letting through a platform complicates it: accommodation is a notified service under section 9(5) of the CGST Act, which makes the platform liable to pay the tax on bookings it carries, and small hosts below the threshold are exempted from registering on that account. The interaction between your own direct bookings and your platform bookings is exactly the point at which this stops being a magazine’s job and becomes your accountant’s.

The operating rules that are new

Registration is the beginning. The guidelines impose continuing obligations, and inspection is now periodic and may be unannounced:

• CCTV at the reception, with footage retained for at least 30 days. The police representative checks for it at inspection.
• A guest register, physical or electronic, holding check-in and check-out records with ID copies for Indian guests and passport details for foreign ones. Foreign guests’ details go to the police department.
• Breakfast is mandatory, and the guidelines recommend building its cost into the tariff. Other meals may be charged for.
• A feedback register and a complaint register with action taken, kept at the reception.
• No letting on a timeshare basis, and no room operated as a dormitory.
• An attached bathroom for each room is desirable rather than required.

Registered homestays are listed publicly on the Department of Tourism website — which, incidentally, gives guests a way to check you that did not exist before.

What happens if you do not register

The Deputy Commissioner constitutes a Tourism Inspection Committee for periodic and surprise inspections. A registration can be cancelled for non-compliance, and the guidelines list the grounds explicitly: failure to maintain standards, overcharging tourists, unhygienic conditions, unlawful activity, malpractice, or misbehaviour with customers. The Deputy Commissioner may also levy a fine at their discretion.

Falsely presenting an establishment as registered carries its own penalty under section 25 of the KTTF Act: a fine of up to Rs 50,000 for a first offence and up to Rs 1 lakh for a second, after a hearing. Continuing to display false registration after a fine is punishable on conviction with simple imprisonment of up to three months, a fine, or both.

Set that against what the department told us in 2012 — that officials inspected certified homestays once a year and could not keep track of unregistered ones. The enforcement architecture is the part of this that has changed most.

What we reported in 2012

The section below is our original report, published on 27 August 2012 after the Mangalore homestay incident, when owners across Hassan and Kodagu were asking what the rules were. It is preserved as a record of the regime the 2025 guidelines replaced. The figures and procedures in it are no longer current.

Holiday Home Times spoke to the Assistant Director, Karnataka State Department of Tourism, Mr Bhaskar. On the categories, he said: “Under the Atithi homestay project, there are two types of homestays that can operate in Karnataka. One Gold and the other Silver. Homestay units categorized as Gold Atithi are required to pay a fee of Rs. 15,000 annually to the department and those categorised as Silver Atithi have to pay Rs. 10,000 per annum.”

“According to our norms, a homestay owner can have two to five rooms — minimum two rooms and maximum five rooms. Only homestay units whose owners are residing on the premises will be considered for registration.”

On exemptions: “The homestays are exempt from luxury tax. Plus, residential power (electricity) tariff is applicable for the homestays. Also homestay owners can fix their tariff based on the facilities extended to tourists. The department plays no role in fixing the tariffs.”

On applying: “The duly filled form should be submitted at the Director or Assistant Director’s office or at any of our department’s district offices. We have a committee comprising state and central government officials. This committee checks the applications and all together inspect the place. The committee officials only inspect the property once a year in June or July.”

On enforcement: “Some of the homestay owners are running homestays without our recognition. We can’t control them, as I told you, because our officials inspect certified homestays only once a year. We can’t keep a tab on them every day. We have requested all owners who are running a homestay to register with us. That’s the best we can do.”

Sources

• Guidelines for Registration of Homestay Establishments – 2025, Department of Tourism, Government of Karnataka, issued under G.O. TOR-133-TDO-2025 and published on the department’s website.
• Karnataka Tourism Trade (Facilitation and Regulation) Act, 2015, section 25; and the KTTF Rules, 2016.
• 56th GST Council meeting, accommodation rates effective 22 September 2025; CGST Act section 9(5) on services supplied through electronic commerce operators.
• Holiday Home Times, original reporting, 27 August 2012.