What is investing in a flat?
Investing in a flat means buying one part of a multi-storey building, an apartment, and owning it. You pay a developer or the previous owner, and in return the flat passes into your name through a deed.
Once you own it, you can live in it yourself or let it out for monthly income. Living in it saves you rent, which is a kind of return too. No institution promises you a set rate of return here.
Say Shirin saves for many years, buys a flat and lets it out. Her tenant pays her Tk 20,000 a month, but service charges, repairs and other costs come out of that. If she sells after many years, the price may or may not be higher than what she paid. The numbers are only an example.
How it works
When you buy a flat, you own not just the rooms but also an undivided share of the land under the building. That share of land should be written into the deed.
There are two ways to buy. From a developer while it is under construction, paying in instalments: the price can be lower, but there is a risk of late handover or the project stalling. Or a ready flat, from a developer or a previous owner: you get what you see, but the price is higher and you pay almost all of it at once.
If you let it out, rent comes in every month, but service charges, holding tax, repairs, empty months and tax all come out of it. Any gain from a rising price only reaches you when you sell, and selling takes time.
Say you let a Tk 1 crore flat for Tk 25,000 a month. That is Tk 300,000 a year in rent, or 3% of the price. Take out a month standing empty, holding tax, repairs and tax on the rental income, and you keep less. Counting registration costs, you really put in more than Tk 1 crore, so the rate is lower still. The numbers are only an example; they vary a lot by area and flat.
Approvals and legal protection
- Building plan approval
- In Dhaka, RAJUK approves building plans; in other cities, the relevant development authority or municipality does. Extra floors or changes beyond the approved plan can cause trouble later.
- Real Estate Development and Management Act 2010
- Developers must be registered, may not sign sale agreements before approval, and sale agreements must be registered. If handover is late, the law provides for a refund with compensation.
- Landowner–developer agreement
- In most projects the landowner and developer split the flats between them. Check whose share your flat falls in and that the power of attorney to sell it is valid.
- Occupancy certificate
- A certificate that the finished building follows the approved plan. Ask about it when buying a ready flat.
Buying costs and running costs
Registration involves stamp duty, the registration fee, local government tax, tax at source and, in some cases, VAT. Together they can be a large share of the deed value; the developers’ association REHAB said in June 2024 that in some cases it came to about 22%. The rates vary by area and from budget to budget.
After buying, there is a monthly service charge (lift, generator, security, cleaning), set by the owners’ association, and a yearly holding tax to the city corporation or municipality. As the building ages, major repairs add to the bill.
What return to expect
According to a 2026 analysis in The Daily Star and user-reported data on Numbeo, yearly rent on a Dhaka flat is roughly 2.5–3.5% of its price. Global Property Guide, using advertised asking prices, put it higher, around 8–11% (fourth quarter of 2025); asking prices and actual deal prices differ, which is why the estimates diverge. All of these are before costs, empty months and tax.
On prices, REHAB data show prices per square foot in various Dhaka areas rising about 2 to 5 times between 2005 and 2020, or roughly 5–11% a year. The market has weakened since then: the number of flat transfer deeds fell each year from 2023 to 2025. So it is not safe to assume prices always rise.
Why people choose it
- You can live in it, or let it out for a regular income.
- Prices have risen over the long run in many areas.
- Flats under construction can be paid for in instalments.
- It can be bought with a home loan.
Points to weigh
- Rent is usually low relative to price, and lower still after costs.
- Registration costs and taxes are high.
- Projects under construction risk late handover or stalling.
- Hard to sell quickly, and harder in a weak market.
- Buildings age, and service charges and repair bills rise.
- Flaws in approvals, land title or the developer agreement can lead to disputes.
Tax
On buying, stamp duty, the registration fee, local government tax and tax at source under section 125 of the Income Tax Act 2023 apply; buying from a developer may also involve VAT. In many city areas the source tax is set by floor area or deed value. The rates can change in each year’s Finance Act.
Rental income is part of your total income and is taxed as “income from house property”, with some costs such as repairs allowed as deductions. A gain on selling may face capital gains tax; changes were reported in the 2026–27 budget, so check the current Finance Act.
The city corporation or municipality charges holding tax every year, based on an assessed annual value.
Tax rules can change with each year’s Finance Act. Before a big decision, check the latest rules or speak to a tax adviser.
How to get started
- Decide the purpose: to live in, to let, or both. If it is to let, first find out the actual rents in that area.
- If buying from a developer, see its registration, the plan approved by RAJUK or the relevant authority, and a copy of the agreement with the landowner.
- Have a lawyer check the land deed, earlier deeds, khatian, mutation papers and land tax receipts.
- Make sure the sale agreement states the total price, instalments, handover date, flat size, land share and compensation for delay; register the agreement and pay through a bank.
- After handover, register the deed and complete the mutation, and find out how holding tax and service charges work.
Check before you start
- Have I compared the rent after costs with what other investments pay?
- Have I worked out the total registration cost in advance?
- Is the plan approved, and is this flat within the approved plan?
- Could I cope with instalments and other costs if handover is delayed?
- If I take a home loan, is the instalment far above the rent it would earn?
- Have I thought about how long it would take to sell if I needed to?