Everything About Property Taxes in Bangladesh

Everything About Property Taxes in Bangladesh: Rules, Rates, and More

Owning property in Bangladesh is a big dream for many! But with that dream comes some important duties, like paying taxes. Don’t worry, it’s not as scary as it sounds. When you buy a new property for your own or your business, you also have to pay property tax and registration fees to the government. This guide will make property taxes in Bangladesh easy to understand. We’ll talk about the rules, how much you pay, and other important stuff.

Why Property Taxes Matter

Imagine a city with good roads, clean water, and safe parks. These things cost money! Property taxes are like your small contribution to make your city or village better. The government collects this money to build schools, fix roads, provide services, and much more. So, when you pay your property tax, you’re helping your community grow!

City Corporation and Local Taxes

If your property is in a big city like Dhaka, Chattogram, Mymensingh, Khulan, Rajshahi, Gazipur, or Sylhet, you’ll pay taxes to the City Corporation. If it’s in a smaller town or village, you’ll pay local taxes to the Pourashava (municipality) or Union Parishad.

These taxes are usually based on the yearly rent value of your property. For example, if your house could be rented for BDT 10,000 per month, the City Corporation might calculate your tax based on BDT 120,000 per year. The exact percentage changes from city to city, but it’s usually between 7% to 25% of the annual rental value.

The City Corporation or local body has its own way to decide this value. You can always ask them for details if you feel it’s too high.

VAT on Property

When you buy a new apartment or commercial space from a developer, you usually have to pay Value Added Tax (VAT). This is a tax on the value added at each stage of production and distribution. For property, it means a percentage of the property’s sale price goes to the government.

Paying VAT on time means your property papers are clear, and you won’t face problems later when selling or transferring the property.

Land Tax in Bangladesh: For the Land Itself

This is a very important tax that every landowner must pay. It’s also called “Bhumy Rajashwa” (ভূমি রাজস্ব). You pay this tax to the Land Ministry. The amount depends on the type of land (residential, commercial, agricultural) and its area.

You can pay land tax at your Upazila Land Office or even online now! This has made paying land tax much easier.

It feels good to know your land records are up-to-date and clean! Paying your land tax regularly gives you peace of mind.

Read more about Land Registration Process

Advance Income Tax (AIT) on Property

When you sell or buy certain types of property, you might need to pay Advance Income Tax (AIT).

• For Buyers: If you’re buying property, especially from a developer, a portion of the payment might be considered AIT.
• For Sellers: When you sell property, especially land or an apartment, a certain percentage of the sale value might be deducted as AIT. This acts like an advance payment towards your yearly income tax.

Many people get confused about AIT. We suggest everyone consult with a tax expert or the Sub-Registrar’s office when buying or selling property. They can tell you exactly how much AIT you need to pay.

Holding Tax

Holding tax is another name for the tax you pay to your City Corporation or local body for your property. It’s called “holding tax” because you “hold” the property. This tax helps maintain basic services like waste management, street lights, and water supply in your area.

Holding tax is usually paid twice a year. You’ll get a notice from your City Corporation or Pourashava with the amount and due dates.

Additional Property Fees You Should Know About

Besides the main taxes, there are some other fees related to property in Bangladesh:

• Registration Fees: When you buy or sell property, you have to register the deed. There are fees associated with this registration, including stamp duty and local government tax. These can be quite a significant amount.
• Mutation Fees: After buying land or property, you need to get the ownership officially changed in the government records. This process is called mutation (নামজারি). There’s a fee for this.
• Surcharge: Sometimes, if you don’t pay your taxes on time, you might have to pay a small extra amount called a surcharge or penalty.

Property Tax Laws in Bangladesh

Property tax rules come from different laws. The main ones include:

• The Income Tax Ordinance, 1984: This law covers Advance Income Tax on property.
• The City Corporation Taxation Rules, 1986 (and similar rules for Pourashavas and Union Parishads): These rules explain how City Corporations and local bodies can collect holding tax and other local taxes.
• The Land Survey Act, 1875, and Land Records and Survey Act, 1950: These are related to land ownership and land tax.

These laws can change. It’s always a good idea to check with the relevant government office or a legal expert for the most updated information.

Key Takeaways on Property Taxes

Understanding property taxes in Bangladesh is important for every property owner. Here’s what to remember:

• Pay on Time: Always try to pay your taxes on time to avoid penalties.
• Keep Records: Store all your tax receipts and documents in a safe location. They are essential.
• Ask Questions: If you are ever confused, don’t hesitate to ask the tax office or a trusted expert.
• It Helps Your Community: Remember, your property tax helps build a better Bangladesh for everyone!

Owning property is a wonderful thing, and by understanding your tax duties, you can enjoy your property with peace of mind.