Last Updated on: 3rd July 2023, 03:55 pm
Federal Govt Plans To Impose A Huge Tax On Buyers And Sellers Of Housing Society Files And Property
The federal government is likely to further increase taxes on non-declarant buyers and sellers in the next budget (2023-24) to also document trading in parcel files with private housing companies.
Sources have informed news media officials that withholding taxes on private housing projects will be avoided as package deals are negotiated across the country. The target would be registered real estate agents involved in commercial transactions between buyers and sellers of real estate.
Many private housing companies engage in tax evasion by not reporting actual transfers and continuing to exchange files without paying taxes. To control these activities on private farms, the FBR will take action in the next budget to document buyers and sellers and ensure payment of taxes.
The legislative changes would guarantee the payment of taxes on the purchase and sale of land by private housing companies and also ensure property documentation.
Currently, the government has increased the tax rate on real estate purchases by non-active taxpayers from 100% to 250%.
In the case of a real estate purchaser who is not on the active taxpayer list, the rate of tax chargeable under Section 236K has been increased by 250% of the rate specified in Section XVIII of Part IV of Schedule 1. The necessary changes have been adopted in Rule 1 of the Tenth Schedule of the Income Tax Regulations.
The FBR will issue higher real estate values from July 1, 2023. The FBR, in consultation with provincial authorities, has started updating property appraisal tables across Pakistan.
FBR asked Key Members of the Tax Office, Sindh, Balochistan, Punjab, Khyber-Pakhtunkhwa, and Gilgit-Baltistan will instruct the Department Heads/District Heads to appoint Revenue Board representatives to consult/review with the teams formed by the Chief Commissioners of the Regional Tax Offices.
FBR is currently implementing the Pakistan Revenue Enhancement Project (PRRP) tax reform program under the auspices of the World Bank. One of the most important parts of the project is the harmonization of real estate valuation between FBR and provincial governments/districts.
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