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Huge stimuli for capital market


Published : 01 Jun 2019 08:47 PM | Updated : 03 Sep 2020 12:27 PM

Aiming to boost the country's growing real estate sector and the capital market, the government is going to provide them huge stimuli according to sources concerned. Real estate sector investors blamed weak policy of the government for keeping the sector stagnant in the past, but now say, the government is very much cordial about making the housing sector flourish.

Excessive land price, high registration cost of flats, and abnormal rate of interest on bank loans have pushed the sector to the verge of collapse. And considering the setbacks, the government has now decided to provide some facilities to the sector in the next budget. REHAB sources said, high cost of registration and excessive registration cost despite opportunity of whitening black money in flat purchase have discouraged the buyers, while at the same time, the government is also being deprived of revenue. 

Data suggests, currently, flat registration cost is up to 16 percent, and for land it is 17 percent, which the buyers have to pay upon the total deed value.
According to reliable sources, the government will cut almost 50 percent of this registration fees. Sources said, tax will be reduced by at least 20 percent on purchasing flat basing on different zones in Dhaka and Chattogram because the government is expecting that flat prices will be tolerable if tax is reduced. Then, buyers will be encouraged to purchase, and investors eager to invest in this sector.

Meanwhile, the government has undertaken massive move to arrange planned habitation for people as part of meeting its pledge to ensuring housing for all by 2030. As part of the initiative the government has built 30,744 houses by providing Tk191.96 crore as loans at a 5.5% interest rate while including 65,710 people in its housing facility programme by constructing 13,142 houses at a cost of Tk92 crore – between March 15, 2016 and September 2018.

The houses were built between July 2009 and September 2018 for homeless, poor, and lower income segment of people. Sources said, the government has completed the construction of 2,399 plots under 12 projects, and constructed a good number of residential flats under five other projects in different districts across the country.

First Vice President of REHAB, Liaquat Ali Bhuiyan said that at least 250 link industries are involved in the housing sector including paint, bricks, rod, cement etc. So once the housing sector gets a boost, all the link industries will become dynamic. He urged the authorities to provide credit facilities at a low interest rate, and allow to use undisclosed income.

Currently up to Tk 25,000 of the dividend, announced by the listed companies of the Stock Exchange, is free of income tax and this amount is being almost doubled in the next budget. If this proposal is approved, investors in the stock market will be benefitted and the share market will become much more active.
It is alleged that many listed companies do not announce dividend despite earning better profit, and there are some companies that do not provide dividend for years together which is causing harm to the investors.

NBR sources said, tax cut on earned dividend would encourage the companies to provide more dividend, investors will purchase more and more shares and ultimately the market will be vibrant.