Black money whitening allowed at a huge cost

Black-money holders would need to pay up to five-time higher taxes to whiten their money investing in real estate from July as the interim government retains the budgetary amnesty on harder conditions.

The source of such undeclared money would have to be disclosed mandatorily to get the amount formalised, as per provisions of the new national budget presented Monday.

Officials have said the provision has been kept in the budget for fiscal year 2025-26 following demand of the realtors to help salvage the sector from a slowdown.

While presenting the Finance Ordinance 2025 to ratify the budget placed outside parliament in the interim period following the July uprising, Finance Adviser Dr Salehuddin Ahmed said the provision "aims to prevent accumulation of undisclosed funds in the hands of land-sellers and to ensure property registration at actual sale value".

In another spur to realty, the source-tax-collection rate from capital gains on land transfers has been reduced from the existing 8.0 per cent, 6.0 per cent, and 4.0 per cent to 6.0 per cent, 4.0 per cent, and 3.0 per cent respectively, depending on locality.

However, based on location of the land, a minimum capital-gain tax on sale of land has been fixed ranging from Tk 500 to Tk 0. 9 million per decimal.

Currently, in affluent Dhaka areas like Gulshan, Banani, Baridhara and Motijheel commercial areas, for apartments of over 200 square metres, a fixed tax of Tk 6,000 per square metre is levied regardless of the property's value. For apartments under 200 square metres, the tax is Tk 4,000 per square metre when investing undeclared funds.

Mirpur, Mohammadpur, Dhanmondi, Mohakhali, Lalmatia Housing Society, Uttara Model Town, Bashundhara Residential Area, Siddeswari, Karwan Bazar, Banasree, Bijoynagar, Wari, Segunbagicha, Nikunja, and Chattogram's Panchlaish, Khulshi Agrabad and Nasirabad areas, the current tax on undeclared funds is Tk3,000 per square metre for apartments under 200 square metres in size and Tk3,500 for those measuring over 200 square metres.

The rates are poised to jump three-to fivefold from July 1, 2025.

For other areas beyond those specified, the current tax per square metre ranges from Tk500 to Tk 1,500, where a threefold increase is anticipated.

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