The tax administrator plans to reduce the flat registration cost and ease the complexities related to value added tax to give a boost to the real estate sector.
The National Board of Revenue is also finding ways to lessen the pressure on the realtors at the time of enforcing the new VAT law in July 2019, said Md Nojibur Rahman, chairman of NBR.
Rahman spoke in a meeting with the leaders of the Real Estate and Housing Association of Bangladesh (REHAB) at Hotel Purbani in Dhaka yesterday.
At the meeting, the realtors proposed NBR reduce the flat registration cost to 6.5 percent from the existing 15.5 percent.
The government should introduce a secondary market to change the ownership of flats like the market for used cards, said Alamgir Shamsul Alamin, president of REHAB.
There should be no registration fee for secondhand or used flats, he said. The ownership of such flats should be changed hands with only 3 percent tax like the used cars, Alamin said.
He said the registration cost is the highest in Bangladesh among the Saarc countries.
The NBR is now giving emphasis on the housing sector to remove the barriers the realtors have long been facing at the time of selling flats, he said.
Currently, buyers have to spend 15.5 percent of a flat's cost for registration, which includes 4 percent gain tax, 3 percent stamp fee, 2 percent registration fee, 2 percent local government fee and 4.5 percent VAT.
Flat sales have decreased by 60 percent in recent times due to high registration costs while the rate of launching new projects has declined by 75 percent, Alamin said.
The association also proposed a cut in the existing 35 percent corporate tax for developer companies to help them raise their paid-up capital, he said.
The REHAB has recently increased the paid-up capital ceiling to Tk 1 crore from Tk 10 lakh for a developer to get a membership of the association, Alamin said.
The higher paid-up capital will increase investment in the sector, he said.
The finance minister has asked the revenue authority to work on how to reduce the flat registration cost, said Jahangir Hossain, a member of the NBR.
A panel has also been formed to work on it, he said.
Currently, REHAB members are building around 15,000 to 17,000 flats every year, according to the organisation.