Crisis in housing business deepens for fresh taxation
Al Amin :
The housing industry will fall into deep crisis due to the new taxation and an increase in land registration fees, according to the entrepreneurs of the sector.
They said that the sector is already in crisis as the unusual hiking in price of the construction materials has grown faster.
Along with this, an increase in income tax at source during land registration, and a new additional tax on various construction materials in the proposed budget will push the country’s housing industry towards deep crisis, they said.
In the new budget, the government proposed to impose a tax of Tk 20 lakh per katha in many areas or 8 per cent of the deed value, instead of the existing 4 per cent.
There is also a condition that whichever is higher must be paid, which means a tax of roughly Tk 20 lakh per katha and in some cases, the amount could be even higher.
On the other hand, in the case of flats, the tax rate has been increased to 14 per cent to 16.5 per cent from the existing 10 to 12.5 per cent in the proposed budget.
The proposed budget also imposed additional duties on cement, stone, tiles, lifts, ceramics, glass, switch sockets, cables, and kitchenware.
The realtors said that the government is going to impose the fresh tax rates at a time when the sector is struggling to rebound from the economic shocks caused by the Covid-19 pandemic and the ongoing war between Russia and Ukraine.
The realtors are the buyers of those construction materials and finally, the price of these pricier products will fall on the flat buyer, the sector insiders said.
“If the proposed budget is not revised, the prices of land and flats will increase in the future,” Alamgir Shamsul Alamin, President of the Real Estate and Housing Association of Bangladesh (REHAB), told The New Nation.
Expressing his apprehension that there will be a crisis in the housing industry, the REHAB president said, “The sales volume has already decreased due to an increase in the price of construction materials, and a decrease in the prices of new DAPs.”
Moreover, the sector will gradually come under serious threat due to the fresh taxation and lack of government policy support in this emerging sector, he added.
Kamal Mahmud, Vice-President of the REHAB, said, “Many will lose the ability to buy flats in the days to come and real estate traders will lose buyers. Housing will become more difficult for lower and middle-class people.”
“Due to the lack of policy support, the country’s housing sector has come under serious threat. Additional taxation will push this housing sector into dire straits,” he added.
