REHAB opposes move to introduce property tax

The country's realtors have suggested the government to offer again the opportunity of declaring the lawfully earned undisclosed money for investment in the real estate sector to help check flight of capital. The real estate association said undisclosed money would easily go out of the country if there is no opportunity to invest the same at home. The government offered the money whitening scheme in 2009-2010 budget. People will be encouraged to have their second home abroad, the apex body of real estate businesses said in a pre-budget proposal placed before the National Board of Revenue (NBR) Tuesday. The Real Estate and Housing Association of Bangladesh (RAHAB) members held a pre-budget meeting with the NBR officials, chaired by NBR Chairman Nasiruddin Ahmed. The association submitted a policy proposal for 2011-12 budget titled 'How the real estate sector can continue to drive growth, employment generation and poverty reduction.' It has proposed that the government allow buyers of apartments to make purchase without disclosing source of money the first time only. "The government can also set a specified, but sufficiently long enough, time for all buyers to invest their legally earned but undocumented for money in the real estate sector," the REHAB said in its proposal. The REHAB members strongly opposed the move to introduce property tax from 2012 as per the proposed draft direct tax law. "The government should not impose any property tax at the moment," the REHAB proposal said. "Already the real estate sector is facing a serious crisis. Introduction of property tax at the moment would further discourage investment in the sector," it said. Former REHAB president Tanvirul Huq Probal said the government will have to arrange interactions before the introduction of property tax because it needs sufficient brain-storming. The REHAB also proposed reduction of income tax to Tk 1000 per square metre in prime areas and Tk 400 in other areas, from existing Tk 2000 and Tk 800 respectively. The rate of stamp duty and other associated taxes and charges on saletransfer of apartment buildings and land plots through the secondary market for real estate should be set at 1.5 per cent, the association said. The association leaders said the measure will promote growth of the sector and encourage secondary market operators. The REHAB proposed reduction of customs duty on generators and other related equipment and inputs to 3.0 per cent, from existing 6.0 per cent. It has also sought duty-free opportunity for import of safety equipment which is currently paying taxes like capital machinery. The REHAB members also sought exemption from collection of Value Added Tax (VAT) on behalf of authorities to avoid conflict with tax officials.