REHAB demands withdrawal of new 15% gain tax in proposed budget

The Real Estate and Housing Association of Bangladesh (REHAB) has strongly opposed the imposition of additional taxes on construction materials and the newly proposed 15% gain tax on apartments received by landowners under joint development agreements, urging the government to withdraw the measure.

The demand was made by REHAB President Ali Afzal at a press conference titled “REHAB’s Response to the Proposed National Budget for FY2026-27” held at the CIRDAP auditorium in the capital on Monday.

While criticising the new tax measures, REHAB welcomed the government's decision to allow undisclosed money to be invested in the purchase and sale of land, flats, and buildings without questioning the source of funds.

Afzal described the initiative as a positive step toward bringing unreported wealth into the formal economy, which could increase investment in the housing sector, create jobs, and improve liquidity in the economy.

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He noted that the real estate sector is currently facing significant challenges, including high interest rates, limited access to long-term housing finance, sluggish sales, mounting bank loan burdens, policy uncertainty, and declining investor confidence.

According to REHAB, the housing sector is linked to around 269 industries and contributes approximately 15% to 16% of the country's GDP. The sector also supports the livelihoods of nearly five million people directly and indirectly.

The association pointed out that registration costs for flats and land currently exceed 13%, discouraging transactions in the sector. Although REHAB had proposed reducing the registration cost to 7%, the recommendation was not reflected in the proposed budget.

The organisation also expressed disappointment that its long-standing demand for establishing a secondary real estate market was not included.

Afzal argued that the proposed 15% gain tax on flats allocated to landowners amounts to double taxation, as landowners are already subject to a 15% tax on signing money received from developers.

He warned that the additional tax would create a new crisis in the housing sector.

Illustrating the impact, he said that if a landowner receives 12 flats worth Tk12 crore in a 24-unit project, the landowner would be required to pay approximately Tk1.8 crore in tax.

Ultimately, he added, the added financial burden would be passed on to homebuyers through higher apartment prices.

REHAB also criticised the proposed increase in taxes and duties on construction materials, including steel rods, PVC resin, PET resin, cold-rolled coil, copper wire, and copper tubes.

The organisation warned that higher costs for these materials would further increase construction expenses and drive up housing prices.

The association called on the government to withdraw the newly imposed tax, reduce property registration costs, and introduce housing loans at single-digit interest rates under easier terms.

REHAB leaders said revitalising the housing sector would help stimulate the broader economy, create employment opportunities, and strengthen the foundation for sustainable development.

They urged policymakers to reconsider housing-related proposals before the national budget is finalised and passed by parliament.

Senior REHAB officials, including Senior Vice President Abdur Razzak, Vice President-1 Mohammad Akhtar Biswas, Vice President-2 Abu Khalid Md Barkat Ullah, Vice President-3 AFM Obaidullah, Vice President (finance) Md Harun Or Rashid, and Vice President (Chattogram region) Mohammad Murshidul Hasan, were also present at the press conference.