We welcome the government move to reduce the taxes for the real estate sector. Reduction of different fees and taxes on property ownership transfer will lower the overall registration cost of flats and plots. At present, property registration cost in taxes and fees is 14 to 16 per cent of total value of a property. Once taxes are reduced, the cost of registration may stand around 9 to10 per cent of the property value.
The present rate of taxes makes registration very costly, while making the already high priced real estate go even further beyond the buying capacity of average citizens. Real estate in Bangladesh is costlier than in many developed countries of the world. Thus it often discourages investors from buying real estate in the country.On the other hand, lucrative offers in some foreign countries to overseas buyers encourage the wealthy people of our country to invest in real estate abroad. This is bad for our economy as hard earned foreign exchange of the country is siphoned off to finance the real estate sector of other nations at the cost of our economy and national interest.
Buyers now show reluctance to complete registration of apartments and plots due to higher cost of the process. Also many flats and plots remained unsold for years. Lowering the real estate taxes will revive the housing and property sector as buyers can complete registration of their land and apartments due to reduced cost.
Thus, bringing down the overall cost of registration will encourage people to feel more secure about investing in real estate as the reduction of taxes and fees will bring down the total cost of a property encouraging more people to invest in the real estate sector of Bangladesh.
The registration cost of properties in neighbouring countries range between 4 per cent and 7 per cent. So REHAB’s (Real Estate Housing Association of Bangladesh) demand to set the taxes and fees at 7 percent from the existing 14-16 per cent is practical. In any case, bringing the cost of apartments and plots within the purchase capacity of majority people should be considered good for overall economy.