Construction costs in Dhaka set to rise as new Building Construction Rules await issuance

The Capital Development Authority (RAJUK) and real estate developers have confirmed the matter. They said that land-use fees and building construction fees may increase several-fold. As a result, the construction costs of residential and commercial buildings will rise significantly. Even the cost of building factories will increase. Although government revenue may grow, there are concerns that the private sector will be negatively affected.
 

According to inquiries, the fee for building design approval, time extension, and land-use clearance was previously Tk 1,000. Now, an initiative has been taken to increase it to Tk 5,000. Additionally, a new fee of Tk 5,000 per katha may be imposed for block-based residential unit construction applications, which did not exist before.
 

Besides this, to obtain approval for residential building construction, a fee of Tk 50 per square meter must be paid. For commercial buildings and factories, the fee may be up to Tk 150 per square meter. No fee will be required for religious establishments such as mosques, temples, churches, and pagodas. However, no part of these religious establishments may be used for any other purpose.
 

At present, the fee is determined in 16 tiers based on the total floor area of all floors of a residential building. For example, if a building has a total floor area of 3,000 square meters, the current construction approval fee is Tk 26,000. Under the new rules, this may rise to Tk 150,000-an increase of Tk 124,000.
 

The larger the total floor area, the higher the costs will be. For instance, a building with a total floor area of 10,000 square meters now requires a fee of Tk 83,000. This may increase to Tk 500,000-raising the cost by Tk 417,000. A building with a total floor area of 30,000 square meters currently requires a fee of Tk 207,000. This fee may rise to Tk 1.5 million, meaning costs will increase by Tk 1,293,000.
 

According to the Ministry of Housing and Public Works, in the third week of last month, the ministry sent a letter to the Ministry of Finance seeking approval for the new fees. The letter requested approval for the revised fees based on RAJUK’s recommendations.
 

When asked, Liakat Ali Bhuiyan, senior vice-president of the Real Estate and Housing Association of Bangladesh (REHAB), told Prothom Alo, “If building construction approval fees range from Tk 50 to Tk 150 per square meter, the cost of constructing residential and commercial buildings will increase further. This may raise the prices of flats and commercial spaces, which would be inconvenient for general buyers. We hope the government will keep the fees within a reasonable limit.”
 

Meanwhile, the DAP Review Advisory Committee has finalized the decision to increase building height limits in various areas through amendments to the new Dhaka Detailed Area Plan (DAP). RAJUK officials have said that these DAP amendments will also be included in the new building rules.
 

When asked, RAJUK’s urban planner Md Mostafizur Rahman told Prothom Alo that design approval fees often vary for differences of just one or two square meters. For this reason, they have proposed determining fees based on each square meter. This was originally set in 2014, but it could not be implemented because the rules were not finalized at that time. In response to another question, he said that the new building construction rules are being harmonized with the Bangladesh National Building Code (BNBC) and the Dhaka Detailed Area Plan (DAP). The rules will be published as a gazette notification very soon.