Guide to Property Taxes in Bangladesh

Nonresidents are generally subject to Bangladesh income tax on Bangladesh-source income.

Rental Income Tax

Rental income from real estate situated in Bangladesh is treated as Bangladesh-source income.

A nonresident individual other than a nonresident Bangladeshi is generally subject to income tax at the applicable maximum individual rate. Rental income is determined under Bangladesh's rules for income from property, with qualifying deductions taken into account in calculating taxable income.

For a foreign nonresident individual, the applicable maximum individual income tax rate is generally 30%. Accordingly, rental income should not necessarily be described as being taxed at 30% of gross rent; the 30% rate applies to taxable income determined under the applicable rules.

Capital Gains Tax

Capital gains from the disposal of property situated in Bangladesh are generally taxable in Bangladesh. The taxable gain is broadly determined from the disposal proceeds after taking into account the property's allowable acquisition cost and other qualifying costs under the applicable tax rules.

Special capital-gains rules apply depending on the asset and holding period. Accordingly, capital gains should not simply be described as being subject in every case to a flat 30% rate.

For nonresident property investors, additional taxes and withholding or collection mechanisms can also arise on the transfer of immovable property.

Property Holding Tax

Bangladesh does not have a single nationwide annual property tax with one uniform rate applicable to all properties.

Local authorities, including city corporations and municipalities, may impose holding taxes and related rates on buildings and land. The tax base, rates, exemptions and associated municipal charges depend on the property's location and the rules of the relevant local authority.

For example, Dhaka's municipal system imposes holding tax and related rates by reference to the assessed annual rental value of property. Consequently, the annual property-tax burden should be determined according to the municipality in which the property is located rather than applying a single national property-tax rate.

Corporate Taxation

Bangladesh applies different corporate income tax rates depending on the type of company. 

The reduced rates are subject to specified conditions concerning the use of banking channels for company receipts, expenditure and investments.

Rental income and taxable gains derived by companies are generally included in the applicable corporate tax regime, with qualifying income-generating expenses taken into account in determining taxable income.

Property Buying Costs and Taxes in Bangladesh