What is happening in the current Real Estate Sector? June 2017 Update

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July 8, 2017 Real Estate Industry

Get the latest scoop from various dailies and stay up to date with the real estate market in Bangladesh and its neighboring countries.

“Completion of building houses for 67,000 families in current year”
Source: Daily Ittefaq
Date: 5 June 2017

The article features completion of several housing projects for 67,445 families using a Tk 236.56 crore fund for developing accommodation for poor people in rural areas.  So far more than 3 lac people have benefitted from this. The information was revealed in the proposed budget of FY 2017-18 discussion in the parliament.  The article also mentions other government initiatives to solve housing problem of the people. Under these initiatives, around 87,506 new flats will be constructed separately in Dhaka and Chittagong. Also to develop planned urban residential projects, government will build 62,000 flats in Purabachal New Town Project, Jhilmil project besides others to provide accommodations to low-income people.

“Residential project for slum dwellers with the aid of World Bank: Finance Minister”
Source: Daily Ittefaq
Date: 8 June 2017

The article features a speech a by Finance Minister Abdul Muhit in response to a query by Government member Abdul Latif on Thursday in the parliament. He responded that a fund of USD 5.7 crores from World Bank will aid to fulfill housing project for slum dwellers in Bangladesh. Out of this, 5 crores is being provided by World Bank Loan and  USD 7.6 lac is being provided by Bangladesh Government for this purpose. The Finance Minister stated that with this initiative, slum dwellers as well as temporary residents in Naraynganj City Corporation, Comilla City Corporation, and Sirajgong Municipality will get financial help and the fund will also be used in other infrastructure development and services.The fund will help slum dwellers in various ways such as providing security, improving environment etc.

“REHAB demands withdrawal of VAT on Real Estate Sector”
Source: Manobzamin
Date:  18 June 2017

The article features REHAB’s reaction to the proposed budget in the 2017-2018 fiscal year. REHAB demanded withdrawal of new VAT laws on the real estate sector which will hamper country’s development as well as negatively affect the basic needs of general people. REHAB leaders made the demand at a press conference held atSonargaon Hotel. REHAB president AlamgirShamsulAlamin and senior vice-president NurunnabiChowdhury were present at the press conference.

ShamsulAlamin said that the budget presented by the Finance Minister will severely affect the construction and housing sector. Currently, there is a minimum of 1.5% to 4.5% VAT imposed on the real estate market. He also said that now a VAT of Tk 75,000 is charged on a TK 50 Lac flat. If the new law is implemented then it will stand in seven and a half million. In the proposed budget, 15% VAT has been imposed on rods and sand. Apart from this, regulatory tariff has been imposed on the import of raw materials for cement. Referring to this information, NurunnabiChowdhury said the real estate sector will be in dire condition if the prices of rods, cement, bricks, stones and sand increase. As a result of this, almost 2 crore people related directly or indirectly to the real estate sector will face problems.

“Building homes for the freedom fighters”
Source: Jagoroniya
Date: 19 June 2017

The article highlights a government project to build homes for the freedom fighters of the country. This was discussed in the question hour in budget session of the parliament on June 19, 2017, in response to a query of Government member MorshedAlam. Liberation War Affairs Minister AKM MozammelHaque said that for the rehabilitation of freedom fighters, a government project has been taken to construct 8000 flats. These multi-storied buildings will be constructed in every district and upazila. The project is being implemented at an estimated cost of 271.11 crore taka. Under this project, a house of 500 square feet is being constructed. So far 2,263 houses have been built with the target of building 2,971 houses. The remaining 387 houses are being constructed with an aim to help the freedom fighters.

 “RERA boon for real estate agents in Pune”
Source: The Economic Times Date: 22 June 2017

The article highlights the positive impact of a Real Estate Regulatory Act (RERA) on real estate agents in Pune. The Act has been enforced on May 1. Under this Act, real estate companies have to register their projects in a website set up by the Government within 3 months or face penalty. So far about 1200 people have registered in Pune. In violation of the law, a real estate consultant has been fined R.s 1.2 Lakh for advertising an unregistered project and misleading the consumer. Real estate agents commented that the Act is proving useful in filtering out malpractices and scams used by some agents.

“GST on real estate at 12%: Government”
Source: The Economic Times
Date: 30 June 2017

The article features Goods and Services Tax (GST) on real estate in India. The Government fixed GST at 18% on underconstruction properties which will be applicable to two thirds of the property value. This means the effective rate is 12%. Under existing laws, buyers had to pay net service tax rate of 4.5% when buying a real estate property. This was due to an abatement of 70% on the total value of the property against construction and land value. However, since the new law does not use the term abatement, Developers are concerned that the tax can increase further. Real estate experts demanded GST on real estate construction to be kept at 12%. However, official confirmed that the actual rate will remain at 12%.