The government is reportedly considering a significant reduction in tax rates on property transactions, particularly for high-value properties, in a move aimed at revitalising the property market.
According to sources, the proposed changes include a major cut in taxes on properties worth more than Rs100 million, as well as a reduction in advance tax for filers from the current 4% to just 0.5%.
Sources reveal that the Federal Board of Revenue (FBR) has already begun working on proposals to implement these tax reductions. The PM has also reportedly directed authorities to expedite the process, emphasising the need to create a more favourable environment for property transactions.
However, the government plans to consult with the International Monetary Fund (IMF) before finalizing the tax cuts, ensuring that the changes align with broader fiscal objectives.
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The proposed reductions are expected to encourage investment in the property sector, boost economic activity, and provide relief to both buyers and sellers.
Just a few days ago, the Excise and Taxation Department announced that houses and residential plots valued at up to Rs5 million will be exempt from property tax. The move came after approval from the Punjab cabinet, according to a notification issued by the Directorate General of Excise and Taxation.
The notification further clarified that future property taxes will now be determined based on the district collector (DC) rate. Citizens were also assured that they would not be required to pay any additional property tax this year, said Umar Sher Chattha, the director general (DG) of excise and taxation.
Meanwhile, the Senate Standing Committee on Finance Sub-Committee, chaired by Senator Mohsin Aziz, held a meeting on Monday where Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial presented measures aimed at curbing the flow of black money in the real estate sector.
Also Read: Property worth up to Rs5m exempted from tax
The FBR chairman told the committee that the government had decided to stop the usage of undeclared income and assets. A major decision was announced to ban the purchase of property worth more than Rs10 million with undisclosed income. He stated that individuals will now be required to declare their income in income tax returns to make high-value property transactions.
Langrial emphasized that over 97% of property transactions in Pakistan are valued at less than Rs10 million, adding that the board is targeting only the 2.5% segment that engages in high-value real estate deals.
“Most of the undeclared money and wealth is funnelled into the real estate sector,” he stated.
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