Market value of land likely to determine official prices

From now on, Bangladesh’s land registration or deed will be set by the market forces to replace the existing pricing through 'Mouza bidding method,’ an official of the Financial Institutions Division, said.

A seven-member inter-ministerial committee convened by Rukhsana Hasina, Joint Secretary to the Financial Institutions Division under the Ministry of Finance, has been constituted to figure out an effective method for land sales and purchases at market prices.

The committee has been asked to submit a report with specific recommendations to the Secretary of the Financial Institutions Division by December 1.

The committee was formed following an official order on October 6 by Deputy Secretary Jehad Uddin who also gave necessary instructions on how the committee will function.

The committee has representatives from the Ministry of Home Affairs, Legislative and Parliamentary Affairs Division, National Board of Revenue (NBR), Bangladesh Financial Intelligence Unit (BFIU) and Directorate of Registration. Jehad Uddin has been made the member secretary of the committee.

As per terms, it is said that for the purpose of transparency in land registration and increasing the government's revenue, the Registration Directorate will collect the necessary data and provide it to the committee for the implementation of land registration at the market price.

The Directorate of Registration will provide necessary information to the Committee and provide overall assistance to the BFIU Committee.

Prior to this, on August 29, a decision was made to initiate the purchase and sale of land at the market prices in a meeting of the National Coordinating Committee formed for the purpose of formulating and implementing various guidelines and policies to prevent money laundering and terrorist financing.

Financial Institutions Division Secretary Sheikh Mohammad Salim Ullah was tasked with figuring out the new system. After that, financial institution secretaries met together and formed this committee.

According to the minutes of the meeting of the coordination committee, the finance minister had said a large amount of legitimate money is getting illegal because highly valued land is shown at a much lower price and the hidden amount is being smuggled abroad later.

The cabinet division held many meetings on the matter, but no decision could be reached. It is better to prevent smuggling than to recover the money smuggled out of the country, the stakeholders concluded.

If land registration becomes market-based, money laundering could be trimmed. In the meeting, Bangladesh Bank Governor Abdur Rouf Talukder said due to the fact that the real value is not shown during the land registration, many times legal money becomes illegal. It is possible to solve this problem only through market-based transactions.

At present land is bought and sold or registered according to "Mouza Rate”. A 'Mouza rate' means the lowest price, that is, no one can buy and sell land by showing a price lower than the 'Mouza rate'. Mouza rates are determined according to the 'Minimum Market Price Rules'. Such rates in different parts of the country were last set in 2016 and registration is being done at those rates.

According to the sources of the Directorate of Land Registration, there are 14 Mouzas under the office of the Gulshan Sub-Registrar in Dhaka. There are 8 categories of land in these 14 mouzas. According to the 'Mouza rate', the price of 1 decimal land in this area varies from Tk 1 lakh to Tk 58 lakh. But nowhere in Gulshan any land could be bought or sold below one crore taka per decimal. According to the 'Mouza price' of the Dhanmondi area, the price of one decimal land is Tk 43 .93 lakh. But in reality, land prices are very high here.

Land registration is currently subject to a stamp duty of 1.5 percent, registration fee of 1 percent, local government tax of 3 percent and value-added tax (VAT) of 1 to 5 percent, respectively depending on the area.