Under the Income Tax Act 2023, the 'gain' tax on plots, flats and apartments and commercial establishments in all parts of the country has doubled and redoubled.
Sources related to the housing sector said due to revenue loopholes, the registration cost has increased 24 times in some areas. Registration costs are now the highest in history.
Economists said the additional tax would ultimately take toll on the consumers. It will increase the price of plot-flat. It will not be possible for many people to buy a plot-flat at such a price. The housing sector will collapse.”
Owners of immovable property in Gulshan, Banani, Motijheel, Dilkusha, North South Road, Motijheel extended area and Mohakhali area of the capital have to pay registration tax the most.
For buying a property in these areas, the buyer will have to pay 8 percent of the deed-value of the per katha land ot Tk 20 lakh, whichever is higher.
The businessmen of the housing sector said, "Most of the buyers buy three or four katha plots to build houses. Some even buy eight or 10 katha land for business needs. As the price of each plot of land is Tk 40 lakh, the price of a plot of three katha is 1 crore 20 lakh taka. If the price of each katha written in the deed is Tk 15 lakh, the price of three katha land will be Tk 45 lakh. If the registration fee is 8 percent of the value of the deed or Tk 20 lakh, whichever is higher, it will be Tk 60 lakh. Is it realistic?'
Alamgir Shamsul Alamin (Kajal), President of Real Estate and Housing Association of Bangladesh (REHAB), said “The cost of buying a plot-flat will increase several times under the new provisions. For several years, I have been demanding a reduction in registration costs, but it has not happened.”
He demanded that Prime Minister change the measures taken for the housing sector in the national budget. Signed by Ahmed Akbar Sobhan, President of Bangladesh Land Developers Association (BLDA) and Chairman of Bashundhara Group, a letter was sent to Prime Minister Sheikh Hasina requesting her to reconsider the gain tax.
According to the letter, the transfer of ownership of immovable property or land and flats in any area of the country will have to be taxed 24 times or more. The buyer has to pay between Tk 3 lakh to Tk 20 lakh per katha for registration of land, flat or buildings. Earlier, it was from Tk 16,500 to Tk 2 lakh.
In the budget of the FY 2022-23, the tax on transfer of land, houses, structures, flats, apartments or floor space in various areas of Dhaka, Narayanganj and Chattogram cities was 4 percent of the deed value. In the budget of the FY 2023-24, the gain tax has been fixed at 8 percent of per katha of the deed-value or Tk 20 lakh, 12 lakh, 10 lakh, 8 lakh, 6 lakh or 3 lakh depending on the area. In some areas, the tax has been more than 24 times.
Area-wise gain taxes
In commercial hubs like Gulshan, Banani, Motijheel, Dilkusha, North South Road, Motijheel Extended Area, and Mohakhali, registration tax is 8 percent of the deed mentioned value or Tk 20 lakh, whichever is higher.
However, in Karwan Bazar, the tax is 8 percent of the deed value or Tk 12 lakh, while in Agrabad and CDA Avenue areas in Chattogram, it is 8 percent of the deed value or Tk 8 lakh.
For properties that include houses, apartments, or spaces, the tax will be Tk 800 per square meter or 8 percent of the deed value, depending on which is greater.
In areas such as Khilgaon Rehabilitation Area, Azimpur, and Rajarbagh Rehabilitation Area, the tax is set at 8 percent of the deed value or Tk 3 lakh, whichever is higher. In contrast, in affluent neighborhoods like Banani DOHS, Dhanmondi, Baridhara DOHS, Mohakhali DOHS, Bashundhara, Niketon, and Baridhara, it is 8 percent of the deed value or Tk 1 lakh.
In Rajuk Purbachal Residential Model Town, Bashundhara Residential Area, and Jhilmil Residential Area, the gain tax is 8 percent of the deed value or Tk 3 lakh which one is bigger.
Additionally, the tax is 8 percent of the deed value or Tk 1.20 lakh whichever is larger in Uttara, Nikunja, Badda Rehabilitation Area, Genderia Rehabilitation Area, Shyampur Rehabilitation Area, IG Bagan, and Tongi.
In Shyampur, Postagola Industrial Area, and Jurain Industrial Area, the tax is 8 percent of deed value or Tk 1 lakh, whichever is bigger. In Khilgaon and Rajarbagh Rehabilitation Area, it is 8 percent of the deed value or Tk 1.5 lakh, whichever is higher, while in Goran and Hazaribagh areas, it is 8 percent of deed value or Tk 1.60 lakh.
In the areas beyond city corporations in Gazipur, Munshiganj, Manikganj, Narsingdi, Dhaka, and Chattogram, and municipal areas in district headquarters, the tax has increased from 3 percent to 6 percent of the deed value.
Besides, any other municipal areas will see a hike in tax from 2 percent to 4 percent and places beyond municipalities 1 percent to 2 percent.
BDST: 1702 HRS, JULY 15, 2023
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