Property Taxes & VAT in Bangladesh

VAT (Value-Added Tax)

The applicable VAT rate for property depends on its size and price. For apartments, the VAT is 4.5% of the deed value if the area is above 1,600 sq ft, and 2% if below. Land sales, however, are exempt from VAT unless the property is transferred to a developer for construction.

Local Government Tax

Depending on the location of your property, you will need to pay 3 – 4% taxes on the deeds for your property to the local government. The charges might be a little lower if your land or property falls under the Dhaka City Corporation or the Cantonment Board.

Land Tax

In Bangladesh, according to current land laws, the land tax is recorded at 5% for every lakh taka in cost. This means that the higher the cost of a property, the greater the rate of land tax that is applicable on it.

AIT (Advance Income Tax)

If you buy an apartment or home from a real estate or land developer, you must pay this tax. The rate varies based on your property’s location and type (plot, land, or apartment).

Apart from this, property owners must also pay holding taxes for local area development. These taxes differ by location and property size—City Corporations usually charge higher rates than Pourashavas. Paying holding taxes on time avoids future penalties and legal hassles.

Property ownership—whether land or apartment—comes with complexities. From purchase to legal transfer, there are multiple steps and ongoing obligations. Before making such a big investment, consult experts who can guide you properly. Making informed decisions early can lead to long-term benefits.