Special Correspondent: The Real Estate and Housing Association of Bangladesh (REHAB) has expressed deep concern over the proposed 15 percent tax on flats received by landowners under joint development agreements and the government`s failure to reduce property registration costs in the proposed national budget for FY2026-27. The association warned that the measures could discourage investment in the housing sector and lead to further increases in apartment prices.

Speaking at a press conference held at the CIRDAP auditorium in Dhaka on Sunday, REHAB President Dr. Ali Afzal said the real estate sector is already facing multiple challenges, including a shortage of buyers, rising construction costs, limited access to financing and policy uncertainty. Imposing additional taxes at such a time, he said, could push the sector into a deeper crisis.

According to Dr. Afzal, landowners currently pay a 15 percent tax on signing money received from developers. Under the proposed budget, an additional 15 percent tax has been imposed on flats handed over to landowners by developers as part of joint venture projects. He argued that the new provision would discourage landowners from participating in joint development projects and reduce the number of new housing developments.

REHAB estimates that in a 24-unit residential project, if a landowner receives 12 flats worth Tk 120 million, the tax liability would amount to approximately Tk 18 million. This, the association noted, is equivalent to the value of nearly two apartments and would ultimately increase costs for homebuyers.

The association, however, welcomed the government`s decision to allow investment of undisclosed income in land, flats and buildings upon payment of applicable taxes. Dr. Afzal said bringing idle funds into productive sectors such as housing could stimulate investment, employment and overall economic activity.

At the same time, REHAB stressed the need for a simple, transparent and investment-friendly tax structure. It urged the government to withdraw the proposed 15 percent tax on flats allocated to landowners and reconsider taxes imposed on construction materials.

The organisation also expressed disappointment that its proposal to reduce property registration costs was not reflected in the proposed budget. REHAB said it had submitted recommendations to the National Board of Revenue, Bangladesh Bank and other government agencies before the budget announcement.

Currently, registration expenses for land and apartment transactions exceed 13 percent, which REHAB claims has significantly reduced property transactions. The association proposed lowering registration costs to 7 percent, arguing that it would encourage legal transactions, improve market transparency and ultimately increase government revenue in the long run.

REHAB further noted that the housing sector is linked to around 269 backward and forward linkage industries and supports the livelihoods of nearly five million people directly and indirectly. Given its contribution to the economy, the association said the sector requires policy support rather than additional tax burdens.

The association also pointed out that several of its key recommendations, including single-digit interest rates on home loans, introduction of a secondary mortgage market, lower registration costs and housing-friendly tax policies, were not incorporated into the proposed budget.

Ahead of the final approval of the FY2026-27 budget, REHAB called on the government to withdraw the proposed 15 percent tax on flats received by landowners, reduce registration costs to 7 percent and adopt policies that encourage investment in the housing sector.