Wherever in the world you decide to go, owning property means that you will have to pay a certain amount in taxes to the government of the country. In Bangladesh, regardless of whether you buy your own apartment or land, you will have to pay different taxes for property ownership. Sometimes these taxes will need to be paid upfront before you can gain ownership, while at other times you will have to pay these taxes periodically, for example once every year during a stipulated time.
There are certain fees that are also a major part of buying property, such as registration fees, stamp duty for the deeds, and application fees. These differ depending on the size of the property or apartment, and sometimes also can be influenced by the location they are situated in. Since these fees differ for every property, it is best to get the information from relevant authorities – usually RAJUK or the Ministry of Housing and Public Works.
Here is a detailed list of all taxes you must pay as an owner of property in Bangladesh:
Local Government Tax
Depending on the location of your property, you will need to pay 3 – 4% taxes on the deeds for your property to the local government. The charges might be a little lower if your land or property falls under the Dhaka City Corporation or the Cantonment Board.
VAT (Value-Added Tax)
The VAT, or value – added tax must be paid based on the price and size of the property being purchased, which, in this case, is apartments. For apartments, anything above 1600 sq ft will cost 4.5% of the deed value, while anything less than 1600 sq ft will cost 2% of the deed value. For land, unless you want to give your land to a real estate company to be developed, then you will not need to pay VAT.
Land Tax
In Bangladesh, according to current land laws, the land tax is recorded at 5% for every lakh taka in cost. This means that the higher the cost of a property, the greater the rate of land tax that is applicable on it.
53FF or AIT (Advance Income Tax)
If you have purchased your apartment or home through a real estate developer or land developer, then you will definitely have to pay this tax. Depending on the area in which your property is situated, the rate of this tax will differ. The rates are also different for plots/ land and apartments.
Other than these major taxes, property owners also have to pay holding taxes for continued development of the area in which their property is. This holding tax differs from area to area, as well as depending on size. City Corporations might have higher rates of holding taxes for smaller plots or apartments compared to Pourashavas. Holding taxes need to be paid regularly to prevent a backlog of taxes which could lead to potential harassment down the line.
Owning property, be it a plot of land or an apartment, is a complex undertaking. There are many steps involved in between purchasing property and becoming its legal owner, and even after that there are often formalities that need to be fulfilled. It is best to take such huge investment decisions after consulting with people who have proper information and are willing to guide you in the right direction. Taking an informed decision early on could prove to be a fruitful investment in the long run.