A.F.M. Asaduzzaman :
Arranging enough money to buy a piece of land or an apartment is very hard for most people. But the matter of money does not end there. Apart from the amount paid as the price of the property, a customer needs to spend an additional amount equivalent of nearly 15 to 16 percent of the property value as registration cost to register the property in their name.
The property registration fee is quite high in Bangladesh. This leads to situations where people would rather not get into property transactions such as buying and selling because of the added costs. Many disputes have also arisen between buyers and sellers due to not registering the property on time. But the good news is that the government has recently slashed the stamp duty cost on property registration by half to 1.5 percent of the deed value as a part of its efforts to resuscitate the real estate sector.
As it stands, the property registration cost includes 4% gain tax, 1.5% stamp fee (which was 3 percent earlier), 2 percent registration fee, 2 percent local government tax and 3 percent VAT. Following the tax cut, the total registration cost of flats of up to 1601 square feet came down to 11.5% of the deed value from the previous 13%. According to real estate experts, the total registration cost for bigger apartments will drop to 14%. The move is appreciable, but registration costs still remain high and this needs to be reduced to a single digit.
The property registration fee is 4 to 7 percent in SAARC countries, while the cost is less than that in developed countries. Many buyers are reluctant to complete property registration due to the overpriced fees in Bangladesh, resulting in a loss of revenue for the government. Still, the slashing of stamp duty charge of property registration will see a reduction of the overall registration fee. This, in turn, might just boost the real estate sector of the country and encourage more buyers to purchase properties.
As more and more people show interest in buying lands or apartments due to the reduced amount of property registration fees, real estate marketplaces a great help to them. Reconfiguring the stress of busy people, the use of technology has become very helpful in the real estate sector as it allows people to view properties from the comforts of their own homes and select their desired ones.
The property registration system is more than just a collection of information regarding land. It acts as a provider of protection for landowners as well. It also provides some protection to buyers with registered rights against the claims of others. So it becomes more of a requirement for the government to give more attention to making the registration fee more convenient. At the same time, property solution provider also becomes quite important because of the role they are playing in digitizing the real estate sector of the country. Not only are they providing several services such as buying, selling and renting of properties, they are also ensuring a trustworthy source of residential and commercial space hunting.
With the less registration fee, a trustworthy source, and the benefits of having registered properties, it is safe to say that we might just see a spike in real estate transactions.
(A. F. M. Asaduzzaman, Director, Public Affairs, Benchmarkpr)