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The Real Estate and Housing Association of Bangladesh (REHAB) has welcomingly endorsed the government's proposal in the fiscal year 2024-25 national budget that allows people to legalise undisclosed income by paying a 15 per cent tax.
REHAB sees this as a potential boost to the mainstream economy if the legalised funds are directed towards real estate investment.
The association also outlined several recommendations at a post-budget press conference at the CIRDAP auditorium in Dhaka on Sunday. These included reforming the real estate revenue collection system, lowering registration fees, reducing income tax for housing businesses, establishing a secondary flat market, offering single-digit home loan facilities, and bringing down construction material costs.
REHAB President Md Wahiduzzaman said, "Considering the overall economic situation, it is a realistic and timely decision to allow undisclosed money to be invested without question. As a result, investment will come in the housing sector, and government's revenue will increase."
He remarked that there is a large amount of undisclosed wealth in the country's economy, for which the staggering registration cost is responsible. There is a 22 per cent payable tax, and if corporate tax is added to that, the total cost of registration is about 30 per cent, he explained.
"We propose to bring the total registration cost down to 7 per cent."
"Lower registration fees will encourage buyers to show the correct value of the land. As a result, the creation of an undisclosed wealth will naturally decrease. And the revenue will increase," he opined.
"We think that after the budget announcement, the country's prominent economists and policymakers should give priority to the acceptable opinions and suggestions of the country's economic development. Adding the issues that have been left out of the budget and passing the finalised budget for FY25.
"The growth, shown in the budget, will be possible if productive sectors, including the housing sector, remain active and dynamic."
He also explained that the registration fee for any old flat is the same as for a new flat. If the secondary market rules are introduced, then, on the one hand, low-income people will be able to buy flats, and employment will rise. And, if the secondary market is dynamic, the country's economy will also be dynamic.
REHAB called for a revision of the registration fee structure outlined in the Income Tax Act 2023. They propose reducing the current Tk 1,600 per square metre for residential properties and Tk 6,500 per square metre for non-residential properties paid by developers to Tk 800 and Tk 3,500, respectively.
REHAB Vice President MA Awal, Vice President Mohammad Akter Biswas, Senior Vice President (Finance) Abdur Razzak, Vice President Delowar Hossain, and Director Muhammad Labib Billah, among others, were also present.
