“Tax reductions proposed for properties worth over Rs100m”
The government is set to revitalise the property market with major tax cuts, offering relief to buyers and sellers while boosting investment and economic activity. As part of this strategy, a significant reduction in property transaction taxes is being planned, particularly for high-value properties.
Sources reveal that the proposed measures include slashing taxes on properties valued above Rs100 million and reducing the advance tax for filers from 4% to just 0.5%. The Federal Board of Revenue (FBR) is already working on implementation plans, with the Prime Minister urging authorities to expedite the process to create a more investment-friendly environment. However, these reforms will first be reviewed with the International Monetary Fund (IMF) to ensure they align with broader fiscal objectives.
The proposed tax cuts aim to boost investment, invigorate the property market, and provide much-needed relief to buyers and sellers. Complementing these efforts, the Excise and Taxation Department recently exempted houses and plots worth up to Rs5 million from property taxes, following Punjab cabinet approval. Future property taxes will be determined based on the district collector (DC) rate, with no additional taxes imposed this year, confirmed DG Excise Umar Sher Chattha.
Simultaneously, measures are being introduced to curb black money in real estate. The Senate Standing Committee on Finance Sub-Committee, chaired by Senator Mohsin Aziz, reviewed initiatives presented by FBR Chairman Rashid Mahmood Langrial. These include a ban on purchasing properties worth over Rs10 million with undeclared income. Buyers must now disclose their income in tax returns for high-value transactions, targeting the 2.5% segment of the market involved in such deals.
Langrial highlighted that over 97% of property transactions in Pakistan involve properties valued below Rs10 million, with undeclared wealth predominantly flowing into the real estate sector.