Realtors yesterday expressed disappointment saying none of their demands was met in the proposed budget for the upcoming fiscal year.

“We are embarrassed as none of our 13 proposals made through the FBCCI was considered,” Alamgir Shamsul Alamin, president of the Real Estate & Housing Association of Bangladesh (REHAB), told reporters at a post-budget briefing at Sonargaon Hotel in the capital.

The association, which represents 1,151 developers, also said they may not participate in pre-budget discussion with the National Board of Revenue in future as their demands went unheeded.

The REHAB's concern came a day after the Federation of Bangladesh Chambers of Commerce and Industry said they could stay away from future pre-budget consultation with the NBR after 394 out of its 447 recommendations were ignored.

The real estate sector contributes 15 percent to Bangladesh's gross domestic product, creating 35 lakh jobs for labourers and 35,000 for engineers, architects and management professionals. 

But the sector is going through a rough patch due to high taxes, lack of policy support and non-availability of low-cost funds for customers.

Unsold flats have weighed the sector down as sales have dropped 80 percent since the 2013 political crisis, while the number of new projects plummeted 90 percent, according to REHAB.

Developers are not being able to repay bank loans as most flats remain unsold, it said.

Real estate business saw a huge boost in tourist destinations in recent times. But business in those areas has not recovered from slowdown following the political crisis.   “So, we needed some additional policy support. But the government has not given any incentive in the budget. Instead, our cost has gone up after the budget,” said Alamin.

“If the government does not take necessary steps now, the housing sector will face huge trouble and the damage will be irreversible. It will ultimately affect the country's economy,” he said, adding that a rebound in the housing sector can boost the economy.

In its budget proposals, the association had demanded a stimulus package, 10-year tax holiday for projects outside Dhaka, reintroduction of a single-digit refinancing scheme, cuts in registration tax, and discontinuation of VAT and tax at source at the retail level.  

The REHAB had also recommended forming a fund to provide housing loans at a single digit interest rate, and cuts in registration fees and income tax.

“But we have not got any fruitful solution,” said Alamin, also managing director of Shamsul Alamin Real Estate Ltd.

The REHAB suggested the government form a Tk 20,000-crore fund so low and middle income people can access funds at 7 to 9 percent interest rates.

Alamin said money that is going out of the country is mainly being invested in the real estate sector of the host countries such as Malaysia or Dubai. “This money should have been invested in our real estate sector,” he said, adding that Tk 76,000 crore was siphoned off in 2013.

He said people investing in the housing sector face questions from the Anti-Corruption Commission about the source of the income.

“If investors face questions about the source of their income, they become discouraged. The investors are terrified if they get any letter from the ACC. It is a major barrier.”    

As a result, the opportunity of legalising untaxed money by investing in the real estate sector is not producing the desired result, said the REHAB chief.

The association had also demanded tax holiday for five years so that it can recover from the slowdown, but it was not considered in the budget.

Nurun Nabi Chowdhury, senior vice president of REHAB, Liakat Ali Bhuiyan, first vice president, and M Ahkam Ullah, second vice president, were also present.