House, flat to be costlier as government imposes fresh taxes

The proposed budget for FY 23-24 includes an increase in the land registration tax at source while import duties on lifts, cement clinkers go up as well

Senior Correspondentbdnews24.com
Published : 1 June 2023, 05:39 PM
Updated : 1 June 2023, 05:39 PM

The proposed budget for the fiscal year 2023-24 includes an increase in taxes and duties in some sectors which will push up the construction cost for houses and flats, according to the Real Estate & Housing Association of Bangladesh (REHAB).

Finance Minister AHM Mustafa Kamal unveiled a Tk 7.6 trillion budget for the new fiscal year on Thursday.

The minister proposed an increase in the tax rate at source ‘rationally’ during land registration in areas under and outside the jurisdiction of RAJUK (Dhaka) and CDA (Chattogram). He also proposed raising the duties on cement and other construction materials.

The existing specific rate of duty of cement clinker has been proposed to raise from Tk 500 taka to Tk 700 per tonne.

Kamal also proposed an increase in the specific rate of duty from Tk 750 to Tk 950 for commercial importers. This might push the price up, the REHAB leaders said.

The import duty on elevators is likely to increase three-fold. The use of elevators is mostly import dependent. At present, some domestic industries have started manufacturing elevators.

Hence, the government wants to increase the duty. An elevator has become indispensable for high-rise buildings. A hike in duty will push up its price.

“At present, some domestic industries have started manufacturing elevators. But there is 5% customs duty on the lift and skip hoists at the import stage. To encourage the expansion of heavy industries in the country, we propose to increase the existing customs duty to 15% on lift and skip hoists,” the finance minister said in his speech.

Apart from these, aluminium and kitchen equipment or household utensils made of aluminium, sanitary ware, and machinery parts will see a VAT rate hike from 5 percent to 7.5 percent, as per the proposed budget.

Escalators, which are used in the multistorey shopping malls, will be pricier as the proposed budget includes an increase in the existing customs duty from 1 percent to 15 percent.

Different taxes and duties on land registration, and construction materials would push up the price of apartments, said REHAB.

“The upcoming budget proposed a rise in tax at source during land registration. Additional duties were imposed on at least 10-12 goods including cement, stone, tiles, lift, and ceramic. Glass, switch socket, cable, and kitchenware. In the future, land and flats will be costlier if this budget isn’t revised and it will impact the flat buyers,” REHAB said in a statement immediately after the budget was unveiled.

“We, who do the construction part, are the buyers of the products which will be pricier. But finally, the price will fall on the flat buyers. The housing sector will face a big crisis if the prices of such products do not remain at a tolerable limit,” said REHAB President Alamgir Shamsul Alamin.