Fresh taxation proposal in the budget triggers concern among developers and buyers

The housing business in Bangladesh is facing a deepening crisis as the government proposed to impose fresh taxation measures that will negatively impact the industry. The move comes as part of the government’s efforts to boost revenue and address the country’s fiscal deficit, but it has triggered widespread concerns among housing developers and potential homebuyers.

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. 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.

Housing developers argue that the additional tax burden will hamper their ability to complete ongoing projects and deter future investments. Many projects are now at risk of delays or even cancellation, as developers struggle to navigate the financial implications of the increased taxation. This, in turn, has created a ripple effect across the construction sector, with job losses and reduced economic activity being felt at various levels. Industry stakeholders are urging the government to reconsider the new tax measures and engage in dialogue to find a solution that is mutually beneficial. They argue that instead of burdening the already struggling housing sector, the government should focus on offering incentives and creating an enabling environment for developers and homebuyers.

The crisis in the housing business comes at a time when Bangladesh is experiencing rapid urbanisation and a growing population. Adequate housing remains a pressing issue for the country, and any setback in the housing sector could have far-reaching consequences on the overall socio-economic development.

As the crisis deepens, stakeholders are hopeful that the government will take heed of their concerns and take necessary measures to alleviate the burden on the housing business. A collaborative effort between the government and industry players could help strike a balance between revenue generation and ensuring affordable housing options for citizens.