The country’s real estate sector has launched a strong attack on the proposed national budget, warning that new tax measures could deal a severe blow to an industry already struggling under mounting economic pressures.
The Real Estate and Housing Association of Bangladesh (REHAB) on Monday urged the government to withdraw the proposed 15 per cent tax on apartments received by landowners under joint development projects and cut property registration costs to 7 per cent in the FY2026-27 budget, arguing that the measures risk stifling investment, raising housing costs and slowing economic activity.
At a press conference in Dhaka, REHAB leaders warned that the housing sector�"one of the country's largest employment generators and a key driver of economic activity�"could face further distress if the proposed tax regime is implemented without revision.
“The real estate industry is already battling multiple headwinds, including a shortage of buyers, escalating construction costs, financing constraints and policy uncertainty,” REHAB President Dr Ali Afzal said.
“Imposing additional taxes at this critical stage could deepen the crisis, discourage investment and ultimately make apartments even more unaffordable for ordinary citizens,” he added.
The association expressed particular concern over the proposed 15 per cent tax on apartments handed over to landowners under joint venture development projects, describing it as a potentially damaging burden on one of the sector’s most common business models.
According to REHAB, landowners already pay a 15 per cent tax on signing money. The additional levy would effectively increase the tax burden on development agreements and could discourage landowners from entering into new projects.
Dr Afzal cited a typical example where a landowner receiving 12 apartments worth Tk 120 million in a 24-unit project would be required to pay nearly Tk 18 million in tax�"equivalent to losing the value of almost two apartments.
“This proposal could significantly reduce the attractiveness of joint development ventures and slow the supply of new housing projects across the country,” he said.
REHAB also renewed its long-standing demand to reduce property registration costs from the current level of more than 13 per cent to 7 per cent, arguing that excessively high transaction costs continue to suppress property sales and encourage unofficial dealings.
The association maintained that lower registration fees would stimulate legal transactions, improve transparency in the property market and eventually generate higher government revenue through increased market activity.
In a notable endorsement of one budget proposal, REHAB welcomed the government's decision to allow investment of undisclosed money in land, flats and buildings upon payment of prescribed taxes.
The association said the move could help channel idle funds into productive investments, inject fresh liquidity into the economy, accelerate construction activities and create new employment opportunities.
Calling for urgent revisions before the budget receives final parliamentary approval, REHAB leaders urged policymakers to adopt a more investment-friendly approach towards a sector that supports approximately 269 backward and forward linkage industries and provides livelihoods for nearly five million people directly and indirectly.
Industry leaders warned that unless the proposed tax measures are reconsidered, the housing sector could face a fresh setback at a time when the economy is striving to regain momentum and restore investor confidence.
