The real estate sector has proposed raising a fund worth Tk1,500 crore in the upcoming budget to refinance the apartment and plot buyers at low interest rates.
They said it will help boost sales as political unrest last year hit the sector.
The realtors want to keep opportunity of whitening black money (untaxed money) continue more five years as the opportunity given in the current fiscal was of no use due to political turmoil.
“As last year political chaos battered the flat and plot sales, some opportunities should be given to the sector in the new budget,” Liakat Ali Bhuiyan, vice president of Real Estate and Housing Association of Bangladesh (REHAB), told the Dhaka Tribune.
He said if the government wants to help the industry recover colossal losses and the state boost its revenue income, the sector’s budget proposals should be taken into account.
He said last year apartment and plot sales slumped 60% from the previous year mainly due to political unrest and high lending rates. “The sale is, however, now recovering though at a slow pace as political situation has become calm,” Liakat Ali Bhuiyan said.
REHAB said it builds 1,500 flats and apartments every year and one-third of them are bought by the Bangladeshi expatriates.”
The sector earns Tk8,000 crore in foreign exchange every year, contributing around 13% to the country’s gross domestic product (GDP).
Around 1 lakh skilled people are employed in the real estate sector directly while another 35 lakh are engaged in the backward linkage industries, REHAB sources said.
REHAB vice president said fund worth Tk1,500 crore should be formed to refinance buyers at low interest rate considering slowdown of the world economy, declining stock market and decline in flat sales.
He said people who reside at the adjacent areas of Dhaka or other municipalities should be given loans from the refinance fund at 8-9% interest rate for buying flat of 1,500 square feet.
The fund will be distributed through Delta Brac Housing Finance Corp (DBH), IDLC Finance Ltd, National Housing Finance and Investments Ltd and other financial institutions, REHAB vice president said.
REHAB sought reduction of income tax for developers since the last year’s political unrest “pushed them into a deep crisis.”
“Income tax on us should be reduced to a rational level as the abnormally rising prices of land and construction materials hit the profit earnings of developers,” said Bhuiyan.
At present, income tax is collected from realtors on the basis of areas.
For residential areas, the association has proposed to reduce the tax to Tk1,000 from Tk1,600 for class-1 area, Tk800 from Tk1,500 for class-2 area, Tk500 from Tk600 for class-3 area.
For non-residential areas, it proposed to reduce to Tk5,000 from Tk6,500 for class-1 area, Tk3,000 from Tk5,000 for class-2 area, Tk1,000 from Tk1,600 for class-3 area.
Gulshan, Banani, Baridhara and Motijheel areas of Dhaka cityare considered as class-1 while Dhanmondi, Lalmatia, Uttara, DOHS, Karwan Bazar of Dhaka and Khulshi, Agrabad, Nasirabad areas of Chittagong are under class-2.
All other areas fall in class-3.
For rapid urbanistion,the Association demanded extension of tax holiday facility at the district level, metropolitans, cantonment areas and areas beyond pourashava.
In the current fiscal’s budget, people residing in the district towns are enjoying tax holiday.
Other proposals included not re-introducing tax at source for common buyers for their purchasing first flat, cutting import duty to 1% from 2% on capital machineries and other machineries to help decrease the construction cost.