The Real Estate and Housing Association of Bangladesh (REHAB) on Thursday warned that new taxes and duties on construction materials in the proposed 2026-27 budget will push up construction costs and ultimately raise flat prices, hitting ordinary homebuyers hardest.

Reacting to the budget announced earlier in the day, REHAB President Ali Afzal said the proposal fell well short of what the housing sector had expected.

"We are still reviewing the budget in detail, but what we have seen so far shows no meaningful policy support or incentives for the housing sector," he said. "On the contrary, new taxes and duties on construction materials are likely to further increase construction costs. The imposition of a specific VAT on steel rods, in particular, will drive up costs and have a direct impact on flat prices and ordinary buyers."

Afzal said REHAB had long been pressing for a reduction in flat and land registration costs, arguing that lower registration fees would stimulate real transactions, attract investment to the sector and ultimately boost government revenue, a demand that went unaddressed in this year's budget.

The REHAB president underscored the sector's broader economic footprint, noting that housing is directly and indirectly linked to some 269 industries.

A slowdown in real estate, he warned, would not only hurt developers and buyers but also ripple across industries including steel, cement, ceramics, electrical goods, furniture and transport, putting the livelihoods of hundreds of thousands of workers at risk.

"Revitalising the housing sector means revitalising the economy, generating employment and strengthening the foundation of sustainable growth," Afzal said, urging the government to give serious weight to REHAB's proposals in post-budget consultations.

For the sector's long-term health, he called for lower registration costs, housing-friendly tax policies, access to long-term low-interest financing and a stable investment climate.

REHAB said it views the budget's provision allowing voluntary disclosure of investment as a positive step, adding that the measure would be reviewed further.