Owning a home is the cherished dream of every middle-class family in the capital, Dhaka and other cities and towns in Bangladesh. Owning a flat promises safety, stability, and the reward of years of hard work and saving. But for the average city dwellers in Bangladesh, that dream is turning into a nightmare.
The problem isn’t just the skyrocketing price of the flat. It is the crushing burden of taxes and registration fees that must be paid to make the flat legally one’s own. In Dhaka, a middle-class flat costing Tk5–7 million can cost around Tk1 million in registration fees. Prime Minister Tarique Rahman recently highlighted the importance of safe, affordable, quality housing for all citizens, as well as planned and sustainable urbanisation. This is a welcome message. In Dhaka and other cities, many families remain tenants, and buying even a modest flat is a lifelong dream. For less affluent buyers, soaring prices are not the only shock – registration fees are just as punishing.
The current property registration system is not merely a bureaucratic problem. It is a financial wall that blocks ordinary people and harms the national economy. A radical rethink is overdue. To help wealthy families own their first flats and to bring transparency to the housing market, the government may drastically reduce registration costs. At the very least, it may waive registration fees for first-time flat buyers in Dhaka and other cities and towns. When a middle-class buyer finally saves enough for a down payment, they are often shocked by the final bill at the registration office. The advertised flat price is only the beginning. The buyer is immediately hit with a barrage of additional costs. These include a 1.5 percent stamp duty, a 1 percent registration fee, around 2 percent municipal or local government tax, and income tax at source. This income tax can vary wildly from 1 to 5 percent depending on the area where the flat is located.
When you add the seller’s capital gains tax, which in practice in Bangladesh is paid by the buyer instead of the seller, the total cost of simply transferring ownership can range from 10 to 12 percent of the document’s value. If you factor in the taxes already paid by the developer or landowner, the total tax burden on a single property can be much higher.
Under Bangladesh’s tax system for the current fiscal year, 2026–27, a 15% capital gains tax has been proposed on non-cash benefits, including flats that landowners receive from developers. Previously, the 15% tax applied to cash signing money, while flats received in exchange for land were not covered by this tax. The association of the country’s realtors, REHAB, has opposed the measure, arguing that it could discourage landowners from entering joint-development agreements. The industry also fears that additional costs could eventually be reflected in flat prices, putting further pressure on homebuyers.
However, average Mouza rates are also driving registration costs through the roof. Within the same area, flat prices vary by location – buyers of flats on narrow streets pay less, while those purchasing along a major road pay more. Yet under the current system, land valuations remain the same whether a property sits on a major road or a narrow street in an area. This Mouza-based valuation system also places a heavier burden on middle-class buyers. This excessive cost structure does not just hurt the buyer. It creates a culture of evasion. When the legal cost of buying a home is so high, it encourages dishonesty. Both buyers and sellers agree to write a lower price on the deed than what is actually paid. They do this to avoid paying taxes on the real amount. In this way, the government itself is encouraging evasion.
The housing sector has become an easy channel for laundering undeclared wealth. The government loses legitimate taxes, and the economy suffers from a lack of transparency. The buyer, meanwhile, is forced to participate in a crime simply to afford a roof over their head. This should be a basic right, not a criminal act.
The solution rests on two simultaneous actions: lowering the registration cost and rationalising property (mouza rate) valuation. First, we must recognise a simple economic principle. High tax rates encourage evasion, while tolerable rates encourage compliance. The government may aim to reduce the total registration cost to one-third of the current rate. A buyer would no longer feel the need to hide the real price to save money. By making registration affordable, the government will actually increase compliance. Transactions will move into the formal sector. While the tax rate is lower, the volume of taxed transactions will rise. This could potentially lead to higher total revenue collection. If the tax rate is low, say 3 percent, the total cost remains affordable. In fact, the buyer pays roughly the same amount they would have paid under the old system of low valuation and high tax. But now they do so legally and transparently.
For first-time buyers, the government may go even further. The registration cost might be completely waived. This would be a powerful step to help the middle class achieve their dream of home ownership. The government already supports less affluent sections of society by giving them houses for free. For the middle class, at least, the government can waive registration costs. This would not be a charity. It would be an investment in the economy and in social justice. For the common citizen, this lowers the barrier to homeownership. It removes the stigma of criminality from a standard business transaction. It provides a clear, white-money path to purchasing a home. This ensures that life savings are invested legally. For the government, it expands the tax net. It brings the hidden cash flowing through the real estate sector back into the mainstream economy. It stops the leakage of revenue and helps develop a transparent tax structure. The surge in property transactions, spurred by lower costs, will also generate economic activity in the construction and banking sectors.
The current tax burden is simply unbearable. It makes housing unaffordable for the honest buyer while allowing the dishonest to hide their wealth. It deprives the government of revenue and distorts the economy.
By drastically reducing registration costs and scientifically digitising property valuations to match market realities, we can strike a blow for social justice and economic efficiency. This is not just about revenue. It is about fulfilling the dream of a middle-class family to own their first home without breaking the law or breaking the bank.
If the government is really keen to ensure safe, affordable and quality housing for every citizen, it may act now. At the very least, it may waive flat registration costs fully for first-time flat buyers. If not fully, then at least to a large extent. A lower, simpler, and fairer tax system for first-time flat buyers in Dhaka and other cities will not only make housing accessible but also make the market transparent and honest.
It is time to make housing accessible, transparent, and fair for all. The dream of a home should not be a nightmare of taxes. Let us build a system that helps people build their lives, legally and proudly. The government may act now to waive registration costs for first-time buyers. This is not just a policy change. It is a moral imperative. It is a step toward a fairer, more honest, and more prosperous Bangladesh.
The views expressed in this article are solely those of the author
The writer is a journalist and columnist
