Real estate route remains open for legalising black money

Black money. UNB_11zon

Dhaka, Jun 2 - Finance Adviser Dr Salehuddin Ahmed on Monday proposed to continue the opportunity to legalize undisclosed income — commonly referred to as black money — through investment in the real estate sector, including purchasing apartments or flats and constructing buildings.

Although the facility remains in place, the tax rates have been significantly increased compared to previous years, as announced in the FY2025–26 budget.

According to the proposal, the tax rates for whitening black money through real estate investments vary by location and property size. Key highlights include:

• Tk 2,000 per square foot for buildings/apartments with a plinth area over 2,000 sq ft in Gulshan, Banani, Baridhara, Motijheel, and Dilkusha areas of Dhaka.

• Tk 1,800 per square foot for similar properties in Dhanmondi, DOHS, Mohakhali, Lalmatia, Uttara, Bashundhara, Cantonment, Siddheswari, Karwan Bazar, Banasree, Bijoynagar, Wari, Segunbagicha, Nikunja (Dhaka) and Panchlaish, Khulshi, Agrabad, Nasirabad (Chattogram).

• Tk 1,500 and Tk 600 per square foot for buildings below 2,000 sq ft in these areas, respectively.

For other city corporation areas:

• Tk 700 per sq ft (over 1,500 sq ft)

• Tk 600 per sq ft (up to 1,500 sq ft)

For district municipalities:

• Tk 300 per sq ft (over 1,500 sq ft)

• Tk 250 per sq ft (up to 1,500 sq ft)

For other areas of the country:

• Tk 150 per sq ft (over 1,500 sq ft)

• Tk 100 per sq ft (up to 1,500 sq ft)

Besides, for new building construction, taxes ranging from Tk 50 to Tk 900 per square foot have been proposed, depending on location.

But, two conditions have been outlined, which are Black money cannot be legalized if it originates from any criminal activities under existing laws and it must arise from a legitimate source of income, albeit undisclosed.

The interim government had previously abolished the black money whitening provision introduced by the Awami League government. That earlier facility allowed legalisation of black money through investment in land, flats, plots, and cash with lower tax rates, which drew sharp criticism for being unfair to compliant taxpayers.

Despite recurrent offers by successive governments over the years, the response to black money whitening schemes has remained limited, with critics arguing that such measures undermine ethical taxpayers and encourage illicit financial practices. - UNB