Land Given, Flat Received: What Does the New 15% Tax Mean?

For decades, joint development has been a common practice in Bangladesh’s housing sector. A landowner gives land to a developer, who constructs a building and provides the owner with flats and other agreed benefits instead of purchasing the land outright. A new tax provision has now brought this model into focus.

Under the tax system for FY2026-27, non-cash benefits, including flats received by landowners from developers, have been brought under capital gains tax at a rate of 15 percent. Previously, the 15 percent tax applied to cash signing money, while flats received in exchange for land were outside this tax.

However, the 15 percent rate does not simply mean paying tax on the entire market value of the flats. The taxable capital gain is determined after deducting the relevant acquisition cost of the land from the assessed value of flats and other benefits, with government mouza valuation used in the calculation.

The Real Estate and Housing Association of Bangladesh (REHAB) has opposed the measure, arguing that it could discourage landowners from entering joint-development agreements.

The industry also fears that additional costs could eventually be reflected in flat prices, adding further pressure on homebuyers. The government, however, aims to broaden the tax base by bringing valuable non-cash benefits under taxation.