Property Registration Taxes and Fees in Bangladesh: A Complete Guide

Investing in real estate is truly an overwhelming and daunting experience, as it comes with immense mental stress and unwarranted financial burdens.

As you already know, when buying property, a lot of hidden and unclear fees, as well as legal hurdles, will be involved, so you should know all the rules and plan precisely.

Hence, today, we have detailed everything you need to know about property Registration taxes and fees in Bangladesh, especially if you are a beginner. So, keep reading!

List of Fees And Taxes Required For Buying Property in Bangladesh 2023

● Down Payment

The down payment is the initial payment for purchasing a property. Typically, the amount is 20-25% of the total cost.  There are no taxes imposed on a down payment.

● Stamp Duty Fees

To legalize your documents and go forth with your investment, you need proper validation from the government. In Bangladesh, the amount of fees to be paid for any property (land or apartment) is 1.5-3% of the total deed value of that property.

● Permission Fees

To own any property, you will need certification of permission from specific authorities. In Bangladesh, this permission certification is provided by RAJUK and the Ministry of Housing and Public Works.

It can cost you anywhere between 300-500tk. However, as the process is time-consuming and exhausting, many brokerage companies provide the service at a much higher cost.

● Registration Fees

During the process of purchasing, you’ll need to pay a registration fee for the deed, exchange, or transfer of the property. In Bangladesh, you’ll have to pay 10-15% of the total deed value as the registration fee.

● Local Government Tax

Depending on the property location, you’ll have to pay 3-4% taxes on your deeds to the local government. The charges may be a bit lower if your land or apartment falls under the Dhaka City Corporation or the Cantonment Board.

● Application Fees

The application fees are only eligible when you apply for a loan from a bank, specifically for investing in real estate.

For taking the loan, do your research and select a back with the best policies and customer service, or you might fall victim to scams.

Roughly, 1-2% is charged on the loan you’re taking for the application fees.

● VAT (Value Added Tax)

The value-added tax (VAT) is to be paid depending on the size and price of the property you’re purchasing. For flats under 1600 square feet, the amount is 2% of the deed value. Whereas apartments larger than 1600 square feet charge 4.5%

However, while purchasing land, the VAT is not applicable unless any developer company or real estate company is involved. In that case, the charge is 2-3%

● Extra Loan Fees

The interest rate imposed on the piece of land or house is called an extra loan charge. IT can vary from property to property, but typically, it’s 5-6% of property value.

● Appraisal Fees

The appraisal fees are applicable when you hire a company or an agent to investigate if the property has any defects. This is an optional step, not mandatory in the purchasing process.

● Notarization Fees

Notarizing the deeds and documents is a must to avoid any illegal disputes. You can get them done by your local government or consult with companies providing notarization services. The fees are Tk 20-30 for per attestation.

● Insurance Fees

Even though buying insurance is an optional step, it’s recommended to do so. In Bangladesh, three types of insurance packages are usually found- replacement insurance, extended replacement insurance, and actual cash value.

These are the list of fees and taxes you should be aware of before investing in a property in Bangladesh.

FAQs

● Does Bangladesh have property tax?

Yes, all purchasable properties in Bangladesh are subject to different types of taxes, and the amount is about 2-30% of the total cost.

● What is the land tax rate in Bangladesh?

In Bangladesh, the land tax rate is 5% per 1 lac. The costlier the property, the more the amount of land tax.

● How much is a flat registration fee in Bangladesh?

The flat registration fee depends on the size of the flat. For smaller-sized apartments under 1600 square feet, it’s 2%, and larger-sized flats impose a registration fee of 4-5%.

In Conclusion

The process of buying property, be it land or a house, is hectic and overwhelming. You’ll have to keep track of countless things, and it’s pretty natural to leave some points unnoticed.

However, if you are unaware of the numerous fees and taxes that come with the purchase, it may soon become a financial burden.

Hopefully, with this article, we’ve thoroughly made you aware of all the property taxes and fees in Bangladesh when it comes to property investment.

We wish you the very best on this journey, good luck!