Hike in land price, registration charge to hit real estate business
Monday, 6 August 2007
Refayet Ullah Mirdha
The proposed hike in the price of land and rise in charges for the purpose of registration will affect the real estate business, according to those involved in real estate business.
Such insiders told the FE that the real estate business was regaining from a shock it suffered in the wake of the recent policy changes. And the proposal to effect a hike in the price of land and also in the charges of registration by a big jump will now again adversely hit the sector, they feared.
The government, on its part, is considering a hike in the prices of residential and commercial lands under the Housing and Public Works Ministry and their transfer and registration fees in Dhaka and others parts of the country, official sources said.
The hike is under consideration because of a large gap that now exists between actual transaction costs and registered deed values thereof in case of transfer, sale or purchase of land and related property, the sources said. "This is one of the largest sources of undisclosed, though not necessarily corruption-tainted, money", sources added.
Meanwhile, the real estate sector saw a slump in sales of ready flats and apartments in the city by 60 per cent in the past several months.
But recently, especially after the announcement of budget for fiscal 2007-08, the people were coming with their hard earned money to buy flats, a real estate businessman told the FE Sunday.
Talking to the FE, president of the Real Estate and Housing Association of Bangladesh (REHAB) M A Awal said the government will receive a large amount of revenue on account of land registration charges if the proposed rates are effected to.
"But a slowdown in real estate business will be noticed, once the proposed rates are fixed for transfer of land and related property," Awal said.
He said Rajdhani Unnayan Katripakkha (RAJUK) recently approved most of the long-pending 16,000 building plans as the government continued its drive against corruption.
"This is a good sign for our business. Previously, it took a lot of time for the approval of plans to construct a building in the city," he said.
Currently, the government rate for the registration of land in the city is 15 per cent excluding value added tax (VAT).
When asked general secretary of the Bangladesh Cement Manufacturers Association (BCMA) Azizur Rahman Selim said the construction sub-sector will also face problems if the real estate business slows down due to the proposed hike in rates for registration of landed property and real estate.
"The overall consumption of cement in the country has been declining over the last few months because of slowdown in rate of construction," Selim said.
The prices of land in the capital and other districts have been proposed to be raised by 200 per cent to 1150 per cent for the purpose of registration.
The proposals are awaiting the approval of the finance and planning adviser and aimed at increasing the collection of non-tax revenue, sources said.
The proposed hike in the price of land and rise in charges for the purpose of registration will affect the real estate business, according to those involved in real estate business.
Such insiders told the FE that the real estate business was regaining from a shock it suffered in the wake of the recent policy changes. And the proposal to effect a hike in the price of land and also in the charges of registration by a big jump will now again adversely hit the sector, they feared.
The government, on its part, is considering a hike in the prices of residential and commercial lands under the Housing and Public Works Ministry and their transfer and registration fees in Dhaka and others parts of the country, official sources said.
The hike is under consideration because of a large gap that now exists between actual transaction costs and registered deed values thereof in case of transfer, sale or purchase of land and related property, the sources said. "This is one of the largest sources of undisclosed, though not necessarily corruption-tainted, money", sources added.
Meanwhile, the real estate sector saw a slump in sales of ready flats and apartments in the city by 60 per cent in the past several months.
But recently, especially after the announcement of budget for fiscal 2007-08, the people were coming with their hard earned money to buy flats, a real estate businessman told the FE Sunday.
Talking to the FE, president of the Real Estate and Housing Association of Bangladesh (REHAB) M A Awal said the government will receive a large amount of revenue on account of land registration charges if the proposed rates are effected to.
"But a slowdown in real estate business will be noticed, once the proposed rates are fixed for transfer of land and related property," Awal said.
He said Rajdhani Unnayan Katripakkha (RAJUK) recently approved most of the long-pending 16,000 building plans as the government continued its drive against corruption.
"This is a good sign for our business. Previously, it took a lot of time for the approval of plans to construct a building in the city," he said.
Currently, the government rate for the registration of land in the city is 15 per cent excluding value added tax (VAT).
When asked general secretary of the Bangladesh Cement Manufacturers Association (BCMA) Azizur Rahman Selim said the construction sub-sector will also face problems if the real estate business slows down due to the proposed hike in rates for registration of landed property and real estate.
"The overall consumption of cement in the country has been declining over the last few months because of slowdown in rate of construction," Selim said.
The prices of land in the capital and other districts have been proposed to be raised by 200 per cent to 1150 per cent for the purpose of registration.
The proposals are awaiting the approval of the finance and planning adviser and aimed at increasing the collection of non-tax revenue, sources said.