Rehab urges growth-friendly housing policy ahead of FY27 budget

With the national budget for fiscal year 2026-27 set for announcement, the Real Estate and Housing Association of Bangladesh (Rehab) has called on the government to treat the housing sector as a growth engine rather than a revenue extraction target.

It said high taxes, steep registration costs and double-digit mortgage rates are pricing out middle-income families and slowing a sector linked to some 269 downstream industries.

In a press release issued today (10 June), Rehab President Ali Afzal outlined a package of demands the association wants reflected in the upcoming budget, centring on single-digit interest rates on home loans, reduced flat registration and stamp duty charges, a dedicated housing credit fund for middle-income borrowers, and rationalised taxes on construction materials.

"We are not asking for special privileges. We want a policy environment that makes housing accessible to ordinary people while keeping an economically vital sector functioning," Afzal said.

The Rehab President pushed back against the perception that the housing sector primarily serves developers' interests, arguing that a single apartment transaction sets off a chain reaction across steel, cement, glass, ceramics, electrical equipment, transport, banking, insurance and architectural services.

"When housing moves, industry moves, employment grows, revenue rises and the broader economy gains momentum," he said, describing the sector's cascading economic impact as a "multiplier effect."

"If registration costs are brought to a rational level, the volume of transactions will increase. The government will collect more revenue from a larger number of deals even at a lower rate," he said. "Revenue will not fall, it will rise."

Afzal described housing as a basic need, not a luxury, and said current double-digit lending rates have pushed home ownership beyond the reach of many middle-income families whose loan instalments already strain household budgets.

He called for a dedicated housing credit fund offering long-term loans on easy terms specifically for middle-income borrowers, a measure he framed as both social policy and economic stimulus.

On taxes affecting construction inputs, Afzal noted that rising prices for steel, cement, glass and ceramics ultimately land on the buyer, eroding affordability.

Rationalising the tax structure on these materials, he argued, would bring down construction costs and widen access to housing.

Asked about the longstanding proposal to allow undisclosed funds into the housing sector, Afzal acknowledged it as a short-term measure to bring idle capital into productive use, but said the durable solution lies in a fair tax regime where rates are reasonable, compliance is simple and people are motivated to declare income voluntarily.

"When the tax burden is excessive, people seek ways to evade. But when rates are rational, both revenue and compliance improve," he said.

With the budget due imminently, Afzal said Rehab remains hopeful, noting that the budgetary process allows for stakeholder input and amendments even after the initial parliamentary presentation.

"Budget day is not the end of the conversation," he said. "We remain positive until the final passage."