Continue amnesty for black money in housing

Realtors yesterday demanded the continuation of unquestioned amnesty for using black money to buy property even though holders of undisclosed income showed little interest to legalise their assets through such investments in the outgoing fiscal year.

The Real Estate and Housing Association of Bangladesh (REHAB) made the call as the finance minister, in his latest budget speech, did not propose continuing the measure in fiscal 2022-23.

Tap here to add The Daily Star as a trusted source

"Tk 20,600 crore was whitened in fiscal 2020-21 through the measure and the amount would rise to Tk 50,000 crore if the government keeps giving amnesty," said REHAB President Alamgir Shamsul Alamin.

The association believes the sector would be able to play a more fruitful role in the government's revenue earnings if its demands are met.

"The country will be able to reach its gross domestic product (GDP) growth target if the manufacturing sector, including the housing sector, remains dynamic," he added.

Alamin was speaking at a press conference at the Pan Pacific Sonargaon Dhaka, where the association shared its reaction to the proposed national budget.

REHAB says the current global economy is in turmoil for a variety of reasons and many fear there could be a bigger economic shock worldwide in the future, which would have an impact on Bangladesh.

"Countries around the world are trying to prevent money trafficking. They are arranging ways to keep foreign currency inside the country."

The association demanded Bangladesh Bank set up a Tk 20,000 crore refinancing scheme in the name of "housing loans". It also urged for a reduction in land and flat registration costs as well as that of construction materials to help create a secondary market business.

Alamin said the demand for housing loans for the last few years has not been reflected in the proposed national budget.

Ensuring housing for middle-class people will be easily possible if the government can arrange loans with single-digit interest rates, he added.

REHAB thinks the land registration cost of 12.5 per cent should be gradually brought down to 2-3 per cent, which would be an appropriate charge.

The REHAB president went on to say that mild steel rods are one of the main components of the housing sector. However, prices of the construction material have skyrocketed in the last few months.

"In the current global scenario, we wanted to reduce the customs duty on steel raw materials. Instead, value-added tax (VAT) has been increased and as a result, the price of the rod will increase further," he said.

Realtors say the cost of various raw materials, including rod and cement, will increase in the next fiscal year because of the increase in VAT and customs tariff.

The National Board of Revenue (NBR) proposed raising the indirect tax by Tk 200 per tonne at the manufacturing stage of billet and rod.

Following the spike, the rate of VAT on the manufacturing of billet will increase 20 per cent to Tk 1,200 per tonne from Tk 1,000 previously.

As a result, rod prices will increase and affect home builders, the REHAB President said.

The NBR also hiked the import tariff on elevators by 19 per cent for the next fiscal year apart from raising the customs duty for associated materials such as cables, tube plates and aluminium foil, which will further fuel housing prices.

REHAB says if the construction cost increases by Tk 500 per square feet, customers will bear an additional cost of Tk 1,000 per square feet.

If the government does not take appropriate steps in such a situation, this sector that employs about 2 crore people both directly and indirectly will be in worse condition, it added.