REHAB opposes additional taxes on construction materials, proposed capital gains levy in FY27 budget

The Real Estate and Housing Association of Bangladesh (REHAB ) has strongly opposed the proposed additional taxes on construction materials and a new capital gains tax on flats received by landowners in the 2026–27 fiscal year budget, calling for both measures to be withdrawn.

At the same time, the organisation today (15 June) welcomed the government's decision to allow voluntary disclosure of previously undisclosed investments in land, flats and buildings during property transactions without questioning the source of funds.

Speaking at a press conference held at the CIRDAP auditorium in Dhaka, REHAB President Ali Afzal said, "The government's initiative to bring undisclosed money back into the mainstream economy is positive. It will increase investment in the housing sector, create employment, and boost liquidity in the economy."

He said the housing sector is currently facing a difficult period due to high interest rates, limited access to long-term home loans, sluggish sales, pressure from bank loans, policy uncertainty and a lack of investor confidence.

According to REHAB, around 269 industries are linked to the real estate sector in Bangladesh, while construction contributes about 15–16% to GDP.

The sector also directly and indirectly supports the livelihoods of around 5 million people, it said.

The organisation noted that property registration costs exceeding 13% have significantly reduced buying and selling activity.

Although REHAB had proposed reducing this cost to 7%, the recommendation was not reflected in the budget, it added.

It also said the long-demanded creation of a secondary housing market is not included in the proposed measures.

Ali Afzal said a 15% tax currently applies to "signing money" received by landowners.

He warned that under the new proposal, landowners would also be required to pay a 15% capital gains tax on the value of flats they receive from developers, which could create additional pressure on the sector.

REHAB also criticised the increase in taxes on construction materials, saying higher duties on items such as rebar, PVC resin, PET resin, cold-rolled coil, copper wire and copper tubes would further raise construction costs and push up flat prices.

The organisation called for the withdrawal of the newly imposed taxes, a reduction in registration costs, and the introduction of single-digit interest rate home loans under easy terms.

REHAB said that energising the housing sector will help boost the broader economy, create new jobs and strengthen the foundation for sustainable development.

It urged the government to reconsider housing-sector-related proposals before the national budget is passed.