The government has cut the immovable property transfer tax to 1 per cent from previous 2 per cent for companies located in three city corporations in Dhaka and Chattogram.

Local Government Division of the local government, rural development and cooperatives ministry on November 5 issued a gazette notification amending the City Corporation Model Tax Schedule-2016.

The benefit will be applicable only to company-to-company transfer of immovable property in Dhaka South City Corporation, Dhaka North City Corporation and Chattogram City Corporation, according to the notification signed by LGD senior secretary Helal Uddin Ahmed.

The new tax rate will come into effect on December 1, it said.

Currently, there is 2 per cent transfer tax on total value of immovable property, mainly land, for all as per the schedule, officials said.

After the change, businesses in the three city corporation areas will enjoy reduced rate of transfer tax, which will cut the cost of doing business, they said.

The new decision coupled with some previous measures will put positive impact on the real estate business, former Real Estate and Housing Association of Bangladesh first vice-president Liakat Ali Bhuiyan said.

The overall cost for registration of land and apartment would come down, he said.

Earlier in July, the law ministry reduced the registration fee to 1 per cent from 2 per cent of the total price of land or flat.

In December 2019, the Internal Resources Division of the finance ministry halved the stamp duty on property registration to 1.5 per cent from 3 per cent of the transfer value.