The government has increased the fees for converting land category from residential to non-residential in the more upscale areas of the capital by 750 percent over the last few years, apparently to discourage commercialisation of the neighbourhoods.
Following recommendations from the parliamentary standing committee on housing and public works ministry, the Rajdhani Unnayan Kartipakkha (Rajuk) increased land conversion fees by almost 7.5 times, or 750 percent, for converting plots from the category of residential to non-residential or commercial in the residential areas Gulshan, Banani, Baridhara, Nikunja and Uttara.
The capital development authority in December fixed Tk5m for the conversion of a plot from residential to commercial, and Tk3m for residential to non-residential, in Gulshan, Banani and Baridhara.
For Uttara and Nikunja, except along the Dhaka-Mymensingh road, the conversion fees were fixed at Tk2.5m for residential to commercial and Tk1.5m for residential to non-residential.
Meanwhile, land owners and real estate developers, who want to convert the category of their plots, are frustrated with the revised rates.
“We are facing difficulties because of the higher rates set by Rajuk,” a land owner told the Dhaka Tribune, wishing to remain anonymous.
Md Wahiduzzaman, general secretary the Real Estate and Housing Association of Bangladesh (REHAB), said the new fees were unreasonable and should be reviewed.
“I think the authorities set the high rates to indirectly discourage conversions. But they should make a clear decision, on one hand the government gives permission, but on the other hand, the state-run regulator (Rajuk) sets unreasonable fees,” he said.
Wahiduzzaman added that the land owners and developers who had applied for conversion three years ago were facing difficulties due to the “tough new conditions”.
“I think the conversion fee is near the same as the land price in those areas now,” he said.
In the second half of 2011, the fee for residential to commercial conversion along approved roads in Gulshan and Banani was Tk2m, while it was Tk1m in Uttara.
Moreover, at Banani Road 11, the fee was set at Tk1m for residential to non-residential. In Uttara, the fee was fixed at Tk500,000, replacing the previous rate of 25% of the land cost.
When the residential to commercial conversion system was initiated in 2004, Rajuk fixed the fee at Tk800,000 for Gulshan and Banani, and Tk 400,000 for Uttara.
Noor-e-Alam Chowdhury Liton, a member of the standing committee, said that it had recommended that Rajuk increase the conversion fees “logically”.
“However, I am not able to make any further comments without checking the new rates set by Rajuk, and also the land prices of the areas” Liton, also a ruling party lawmaker, said. Another member, Asaduzzaman Khan, said the standing committee had recommended that Rajuk increase the fees around a few roads of some of the upscale areas, in proportion to the present prices of residential and commercial plots.
“Land owners of those areas can convert their residential land to non-residential or commercial, paying the difference in fees,” Khan said. “The owners took plots from the government for residential use. So, those who want to convert for non-residential use, they must pay the extra fees set by Rajuk.”
Meanwhile, a member of Rajuk’s estate department, Sheikh Mohammad Shamim Iqbal, said he had just joined the post and could not comment on the issue as he was not present at the meeting when Rajuk set the land conversion fees.
However, Akhter Hussain Bhuiya, a former member of the same department who was present at the meeting, said Rajuk took the decision to keep the residential areas free from commercialisation.
“Rajuk wants less commercialisation of residentail areas, and the decision was taken to free the areas from congestion,” Bhuiya said.