The government has slashed the stamp duty on property registration to 1.5 per cent from 3 per cent of the transfer value to reduce the overall registration cost of land and flats in the country.
Internal Resources Division of the finance ministry on December 26 issued a gazette notification signed by IRD senior secretary Md Mosharraf Hossain Bhuiyan, also the chairman of National Board of Revenue, reducing the duty on the total transfer value of the property.
Finance ministry officials said that the government had made a decision of reducing various fees and taxes on property transfer in May as per a recommendation made by a joint committee of the NBR and the Real Estate and Housing Association of Bangladesh to revive the country’s housing sector.
In addition to the stamp duty, the finance ministry also decided to request the law ministry and the Local Government Division to cut registration fee and local government tax respectively in a bid to lower the overall registration cost of flats and plots.
As per an instruction of finance minister AHM Mustafa Kamal, the revenue board at that time also requested the ministry and the division to take necessary measures to reduce the fee to 1 per cent from 2 per cent and the local government tax to 1.5 per cent from 2 per cent.
Earlier, in the budget for the current fiscal year 2019-2020, value-added tax wing of the NBR reduced the VAT payable by the land development authority to 2 per cent from 3 per cent as part of the decision.
But the LGD and law ministry are yet to issue gazette notification reducing the tax and fee.
There is also 4 per cent gain tax on property transfer, which is credited to income tax wing of the NBR.
REHAB vice-president Liakat Ali Bhuiyan on Sunday told New Age that the reduction in stamp duty would lower the registration cost of flats and plots.
But the government should implement its decision of reducing other taxes and fees to bring the overall registration cost to 7 per cent as per the recommendation made by the association to bring the cost within the capacity of people, he said.
The total property registration cost including all fees and taxes in the country varies between 12 per cent and 14 per cent of the total deed value.
Realtors have claimed that the overall cost of transfer of flats and plots became higher in the country due to higher fees and taxes.
A large number of flats and plots also remain unsold, they said.
REHAB members said many buyers were not taking registration of their property as they were waiting for a reduction in the fees and taxes.
Implementation of the decision of reducing other taxes and fees would put a positive impact on the real estate sector, they said, adding that the sales of flats and plots as well as the rate of registration would increase.
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