Housing sector urges 3% withholding tax, lower registration fees

Facing mounting pressure from high taxes and registration fees, the Bangladesh Land Developers Association (BLDA) called for a major overhaul of the land registration tax regime, proposing that withholding tax be reduced to 3% of the deed value to help revive the struggling real estate and housing sector.

“Even after paying around 11.5% in registration costs, we are required to pay withholding tax at Tk1.50 lakh per decimal, which seems excessive,” BLDA said. “We propose imposing this source tax at 3% of the deed value instead of a fixed per-decimal rate.”

These concerns were raised during a pre-budget discussion in Agargaon on Wednesday with the National Board of Revenue (NBR), where business associations sought policy support. 

NBR Chairman Abdur Rahman Khan noted that although registration costs are officially borne by sellers, in practice they are often passed on to buyers, which he said needs correction.

The Real Estate and Housing Association of Bangladesh (REHAB) also demanded a reduction in land registration costs, arguing that high expenses discourage buying and selling of land and apartments, which ultimately affects overall revenue collection. 

REHAB suggested that lowering registration costs to a reasonable level would boost transactions and increase government revenue.

The association further highlighted that VAT is being imposed on both building construction and land development, raising overall costs. 

They proposed fixed VAT rates on capital gains, stamp duty, and apartment sales to ease the financial burden on developers.

Read More

LPG conversions in motorcycles rise amid fuel crisis

They raised concerns over tariff disparities and misuse, noting that some commercial importers exploit identical HS codes, creating unfair competition for local manufacturers. 

They proposed keeping existing supplementary duties for local producers while increasing duties on importers.

Importers were also accused of under-declaring marble block imports to pay lower duties, with finished product prices being shown artificially low despite rising raw material costs, harming domestic industries. 

In response, the NBR assured that proper valuation of goods would be enforced based on actual invoices, with verification and necessary action taken.

Other sectoral demands included: the cement industry asking to remove tiles from the list of luxury goods, calls from pharmaceutical, tannery, tea, and leather sectors for a more flexible tax and duty policy, particularly ahead of Bangladesh’s graduation from Least Developed Country (LDC) status.