|Published : 22 Nov 2016, 20:44:23|
Equal treatment of land and flat purchaser
THE business of realtors has not been going well for the last couple of years owing to high price of flat and registration cost. As per the National Budget 2015-16 the following Value Added Tax (VAT) has been imposed on price of flat and land on which flat is constructed. VAT is imposed at the rate of 1.5 per cent for flats up to 1,100sft, 2.5 per cent up to 1,600sft and 4.5 per cent up to 1,600sft and above. In addition to VAT, 5.0 per cent registration fee, 5.0 per cent gain tax and 5.0 per cent stamp duty have been imposed on flat price including cost of proportionate land. But when one purchases a piece of land no VAT is required to be paid. But if some one constructs a building on the land one has to pay VAT on the construction cost of the building. As a piece of land suitable for construction of residential or commercial building costs too high, most people cannot afford land and construct building individually now. In this situation, people opt for flats as many people can have flats on a single piece of land. The flat purchasers have to pay VAT for the portion of land as well as for the flat (part of building).
It is not rational. Flat purchasers should pay registration fee, gain tax and stamp duty on the portion of land of the flat concerned. He or she should not pay VAT, registration fee, gain tax and stamp duty against the flat. The government has imposed registration fee, gain tax and stamp duty on the portion of land on which the flat is built. That is, at the time of registration, a flat purchaser should pay stamp duty, registration fee and gain tax on the value of the land portion. Equal treatment should apply to purchaser of flat and to land purchaser in respect of registration.
Md. Ashraf Hossain