Bangladesh Property Tax Guide 2026

Property Transfer Costs — Stamp Duty and Registration Fee

When transferring immovable property (land or buildings) in Bangladesh, the buyer bears the following transaction costs:

• Stamp duty (স্ট্যাম্প ডিউটি): 1% to 2% of the property value (deed value or government valuation, whichever is higher). Rates vary by city — Dhaka and Chittagong typically at the higher end (2%), while other areas may be 1%.
• Registration fee (রেজিস্ট্রেশন ফি): 1% to 2% of the property value. The Sub-Registry Office (সাব-রেজিস্ট্রি অফিস) charges this for recording the deed of transfer.
• VAT on transfer: 1.5% on the deed value (applicable to property transfers as a form of service — VAT is payable on the registration service).
• Source tax (deduction at source): 5% to 10% of the consideration for properties exceeding BDT 25 lakh (buyer must deduct and deposit).
• Capital gains tax: Any profit on sale is added to the seller's total income and taxed at applicable IIT rates (individual) or corporate rates (company).

Total transaction costs typically range from 5% to 8% of the property value, including stamp duty, registration, VAT, and professional fees (lawyers, deed writers).

Annual Municipal Property Tax (Holding Tax)

Annual property tax (হোল্ডিং ট্যাক্স / holding tax) is levied by city corporations, municipalities, and union parishads on all buildings and land within their jurisdiction:

• Rate: 8% to 15% of the annual rental value (ARV) of the property. The ARV is determined by the local authority based on floor area, location, amenities, and prevailing market rents.
• Owner-occupied: Typically taxed at a lower effective rate (50–75% of the standard rate) in some municipalities.
• Vacant land: May be taxed separately at a rate of 5% to 10% of the ARV or a per-decimal flat rate.
• Payment: Annual or semi-annual; paid to the city corporation/municipality directly.
• Penalties: Late payment attracts 5% to 15% surcharge per annum.
• Exemptions: Government buildings, religious institutions, educational institutions, and charitable hospitals are generally exempt.

Capital Gains on Property — Taxed as Income

Bangladesh does not have a separate capital gains tax. Gains from the sale of property are treated as ordinary income and taxed at the seller's applicable IIT rate (0–25% for individuals) or corporate rate (22.5–37.5%).

• Holding period: No distinction between short-term and long-term gains — all gains are taxed as income.
• Indexation: No indexation relief is available. Cost of acquisition (actual purchase price plus improvement costs) is deducted from the sale proceeds. No adjustment for inflation.
• Exemptions: Gains from the sale of a principal residence may be exempt under certain conditions (one property per lifetime, subject to rules prescribed by the NBR). Gains reinvested in another residential property within 2 years may qualify for rollover relief (limited provisions).

Income Tax on Rental Income

• Rental income: Added to total income and taxed at applicable IIT rates (0–25%).
• Deductions allowed: Repair and maintenance (25% of rental income is allowed as a standard deduction without proof; actual expenses above 25% can be claimed with documentation), municipal taxes paid, insurance premiums, and interest on loans for property acquisition/improvement.
• Vacancy allowance: No specific vacancy deduction; tax is on rental income actually received.
• Source tax on rent: Tenants must deduct tax at source (5% to 10% depending on annual rent amount) and deposit with the NBR. The landlord can claim credit for tax deducted.

No Annual Wealth Tax

Bangladesh does not levy an annual wealth tax on property holdings. However, the income tax surcharge on individuals with net wealth exceeding BDT 5 crore (10–25% of the income tax liability) functions as an indirect wealth tax. Municipal holding tax is the only recurring annual property-related cost. See our Wealth Tax Guide for details.

FAQs

Can foreign nationals buy property in Bangladesh?

Foreign nationals cannot directly purchase land or buildings in Bangladesh except with prior government approval and only for specific purposes (e.g., setting up a business). Non-resident Bangladeshis (NRBs) can purchase property under certain conditions with approval from the Bangladesh Investment Development Authority (BIDA) or the central bank.

How is property valued for stamp duty purposes?

Stamp duty is calculated on the deed value (consideration stated in the deed) or the government valuation (মিউটেশন মূল্য / mutation value), whichever is higher. Government valuations are updated periodically (usually every 3–5 years) and vary by mouza (village/ward) in each district.

Is there a first-time home buyer benefit?

No specific first-time home buyer tax benefit exists under Bangladesh tax law. However, some city corporations offer reduced holding tax rates for owner-occupied properties compared to rental properties.

Disclaimer

This guide provides general information about property taxation in Bangladesh for the 2026 assessment year. Tax laws, registration fees, and municipal rates may change. Always consult with a qualified property lawyer or tax advisor for advice specific to your situation. InvestmentKit does not provide tax or legal advice.