A Complete Guide on Property Taxes and Fees in Bangladesh

Are you thinking of buying your dream property or investing in the real estate industry? Before jumping on to buy the property, you need to know about the commercial and residential property taxes and fees. There are multiple types of property-related taxes and fees applicable like registration fees, stamp duty fees, sales permission fees, front money, and notarization fees. In this article, I am going to discuss all these fees and taxes. Let’s focus on that.

What is Property Tax In Bangladesh?

As an owner of the property, you have to pay a specific amount of money to the authority based on the value of the entire property. Generally, the government sets the property tax for each property owner has to pay the property tax. 

Property tax management is the most important factor in the real estate world. If anyone doesn’t want to pay the tax, that property will be considered an illegal asset. Property tax is also called holding tax in our country.

Property tax is determined based on multiple factors. Such as 

• Property Location – The location of the property is the most significant factor for the tax. The main type of location-based property tax is – city corporation(Dhaka north and south) holding tax and union holding tax.
• Property Type –  Also the tax is determined based on the type of specific property like residential flats or buildings, commercial property,  and industrial property. 
• Yearly Property Value – Yearly value of the entire property is important for determining the holding tax. 

Also, property taxes are determined based on other factors such as the property owner’s occupation, age, etc.

How To Get Holding No. For Property Tax

For the property tax, you must need a holding no for your entire property. Through the holding tax registration process your property information will be stored in the government database.  So they can verify the property and calculate the right amount of tax.

First of all, you have all these papers to become eligible for the property taxpayer.

• Holding tax application form.
• Ownership deed.
• Rental receipt.
• DCR paper.

After arranging all these papers you have to contact your nearest land office. They will verify all the necessary papers and applications. The holding authorization process will take up to 15-90 days. It differs based on the structure of the current property. So when the authorization process is finished, you can pay the tax on the property.

The Process of Property Tax Calculation

I think you have already got an idea about how you can register your property for the holding tax. Now the time has come to pay the property tax and legalize your property. So how can you pay the property tax? No worries, in this section I will go through an in-depth discussion about the process of calculating property tax in Bangladesh.

Suppose you have a residential building in the Dhaka north city corporation area. The government set the holding tax at 22 % of the yearly value of the entire property of the metropolitan area. 

But the entire 22% is not property or holding tax. This is the combination of multiple types of property-related tax. 

• Property tax – 7%
• Conservancy rate – 7%
• Road lighting rate – 5%
• Water supply rate – 3%

The calculation process of the holding tax is not fixed. Every 5 years the government’s land authority will re-analysis and change the percentage rate based on the current budget and currency situation.

You can pay the property tax once a year. But there is an option available to pay the tax every three months. This will be helpful for most small property owners. Because they don’t have to pay lots of money at a single time.

The property tax is generally changed for multiple purposes.

• When someone builds a new house or buys new land.
• If someone upgrades or increases the property.
• If the property got damaged.

The government land authority is very strict about the deadline for the tax payment date. If a property owner fails to pay the tax within the deadline, he or she has to pay a 15% extra charge. 

Different Types of Property-Related Fees

Well, I hope you have already got an extensive idea about property-related taxes in Bangladesh. Now you can easily calculate and pay your tax without facing any major difficulties. Along with the tax, you have to pay multiple fees to become the owner of the property. In this section, I am going to discuss some major property-related fees. So let’s focus on that.

1. Registration Fees

When you are going to buy a new flat or commercial property, you must go through a proper registration process. Because the registration ensures your ownership of that property. It can be considered the initial step of buying the property. The property registration process is a long-term process. 

You have to go through multiple types of procedures. The buyer and seller should be represented at the time of the registration. As a buyer, you have to collect these necessary papers like deeds, account books, national id cards, etc. Also, you should contact a certified lawyer to review all the asset-related papers. 

You might not have enough knowledge about property-related papers. So a professional lawyer will help you to understand and collect all the necessary data. How can you know about the registration fees? You can easily find out about the registration fees from this website. It’s a government-authorized property-related website.

Go to the website. Now click on the “dolil fee calculator”. You have to fill up some necessary data.

• Deeds Type
• Division (Property area)
• District
• Office Name(Registry office)
• Property Price
• Deeds pages

Carefully fill in all this information. Now it will automatically calculate the registration fee of the property. Registration mainly depends on the price of the entire property.

2. Stamp Duty Fee

The stamp is a necessary part of processing the deeds and money transaction agreements for any type of property. Stamp especially helps in verified and secured purchases. When you are registering your property you must write a stamp. Otherwise, you will face multiple legal and fraud-related issues.

You can find multiple types and prices of stamps. The price of the stamps depends on the type of purpose. For the property registration stamp, you have to pay 300 BDT. During writing the stamp you must ensure the appropriate information about the buyers and the seller. 

3. Front Money

When you are going to purchase a commercial property or residential property, you must think about the front money or down payment. Well, the down payment is a percentage of the full price of the entire property.

As a property buyer, you must ensure that you are going to purchase that asset. Because the seller needs to trust you. Suppose you are going to purchase a property with a bank loan. You can’t pay all the money at once. So before purchasing the property you need to sign an agreement with the current property owner.

At this time, you have to pay the down payment or front money for the property. Also, the bank will verify the down payment record for the property. The down payment will be 10-20% of the whole property price. Suppose you are going to buy a flat at 68,00,000 BDT. The 10% of the flat price will be 680,000 BDT.

You need to remember some important factors during the down payment for commercial property.

• Before down payment, clear all the commercial debts.
• Set up a precise payment saving goal for the down payment.
• Reduce the other commercial expanses.
• Use a separate savings account for the down payment.

• Property Sales Permission Fee

Sales permission fee is another important factor for purchasing or selling any real estate commercial and residential property. The property owner can’t independently sell the property whenever they want. But the sales permission is not applicable for the freehold property. If it’s a leasehold property, the owner must need sales permission from the governmental authority.

Which type of property requires sales permission? If the real estate property is organized under these organizations, the property owner must need sales permission from the government.

• Rajdhani Unnayan Kartripakkha (RAJUK)
• Chittagong Development Authority(CDA)
• Ministry of Housing and Public Works
• National Housing Property

To get the sales permission, you have to arrange all the legal papers and send an application to the authority. During the application, you need to pay sales permission fees. Suppose you have a flat in RAJUK. The RAJUKs property sales permission fee is around 400-500 BDT.

4. Notarization Fee

Notarization is a very important factor in purchasing any property. You know that the verification of the property-related necessary papers is always important. Because proper verification will keep you safe from future problems.

You have to consult with a legal advisor or lawyer for asset-related verification. Because they will understand all the legal terms and conditions of the asset-related papers. After the verification of deeds and other papers, you need to follow the attestation process. 

In the attestation process, an experienced lawyer will attest all the papers. This means these papers are prepared and legal to take the further step. There are multiple types of fraud notarization agencies available. So you should call your lawyer during the notarization process. Property papers notarization fee is 20-50 BDT.

Final Words

Whether you are going to purchase a commercial property or personal property, you must have to pay some taxes and fees to the government. It’s essential to legalize your property. But if you don’t have enough knowledge about the taxes and fees, it can cost an extra amount of money. Taxes and fees mainly depend on the location and the types of each property. Go through a proper analysis before purchasing the property.