The stamp duty and registration fee on the sale and transfer of property would also be brought down for the upcoming fiscal year (FY)2019-20
The government has proposed 20%-29% tax reduction on housing and land investment based on location so that taxpayers get opportunity to voluntarily reveal their undisclosed investment on purchase or construction of flat or building.
Besides, the stamp duty and registration fee on the sale and transfer of property would also be brought down for the upcoming fiscal year (FY)2019-20, AHM Mustafa Kamal said during the proposed budget speech on the first day of budget session in the parliament on Thursday.
In his budget speech the minister said: “The real estate sector in our country has remained almost stagnant for a long time. The main reason behind this is slow expansion is the existence of an exorbitant level of stamp duty and registration fee. As a result, the government is losing revenue as well, and the volume of un- disclosed income is also rising.”
He further said: “At present the Income Tax Department is playing a lenient role about the sources of fund invested in the real estate sector. As taxpayers feel discouraged to pay taxes due to high tax rates in this sector.
“Decreasing the existing real estate tax rates will encourage taxpayers to voluntarily disclose their tax returns.”
“It will also facilitate the expansion of the real estate sector on one hand, and augment our revenue collection on the other,” Kamal added.
Currently, total fees for registration of flats are 14%-16%, and 17% for land registration.
Location based special tax treatment in respect of investment in residential buildings, flats, lands
In Gulshan, Banani, Baridhara, Motijheel and Dilkusha Commercial areas, Tk4,000 per square metre tax will be imposed and would not exceed 200sq/m which was is Tk5,000 now. If it exceeds 200 Sq/m the tax rate would be Tk5,000 per Sq/m, which is currently Tk7,000
In Dhanmondi Residential Area, Defence Officers Housing Society (DOHS), Mohakhali, Lalmatia Housing Society, Uttara Model Town, Basundhara Residential area, Dhaka Cantonment in Dhaka and Agrabad , Khulshi and, Nasirabad area of Chittagong , the tax rate will be Tk3,000 per sq/m till 200sq/m and Tk3,500 above 200sq/m. Tk10,000 real estate tax will be imposed for per sq/m of land in the above mentioned areas also.
For buildings, apartments and lands situated in areas of any city corporation and other areas except the mentioned ones, the tax rate would be Tk800 per sq/m till 120sq/m, Tk1,000 till 200sq/m and Tk1,500 above it.
Real Estate and Housing Association of Bangladesh (REHAB) Vice-President Liaquat Ali Bhuiyan while speaking to Dhaka Tribune, said: “The proposed budget will have a positive impact on the real estate sector and the business will grow also.”