Government Proposes Significant Tax Cuts for Property Transactions
February 1, 2025
Introduction
Govt to Cut Taxes on High-Value Property Deals
The government is planning to slash property transaction taxes, especially for high-end properties to boost market activity.
According to sources, the proposed changes include a big tax cut for properties above Rs100 million. And the advance tax for filers will go down from 4% to 0.5%.
The property scene in Punjab, Pakistan is getting a serious shake-up ’cause of some fresh rules that are all about taxes and fines on buying and selling land and buildings. Now, they’re cracking down big time on deals that try to skip the bank, they’ve switched up the rules on how much tax you gotta pay when you sell property for a profit, and they’ve also given the lowdown on when the taxman gets to take a slice of your sale. We’re diving deep into these big tweaks checking out what they mean for everyone in the game, and tossing out some handy tips for all you folks trying to keep up with the times when it comes to property taxes in Pakistan when the economy’s doing its thing.
1.FBR Plans Tax Cuts for Property Transactions
FBR is working on the recommendations for these tax cuts and the PM is pushing for quick decision to create a better environment for real estate business. But before finalizing the changes, the government will consult with IMF to match the policy with overall fiscal targets.
These tax cuts will attract investment, boost economy and benefit both buyers and sellers in real estate.
2. Punjab Grants Tax-Free Properties Up to Rs5 Million
In another development, Excise and Taxation Department has announced that properties including houses and residential plots up to Rs 5 million will be tax free. This was approved by Punjab cabinet and was confirmed in a notification by Directorate General of Excise and Taxation.
According to the notification, the district collector (DC) rate will now be the basis for determining future property taxes. Umar Sher Chattha, the director general (DG) of excise and taxation, reassured citizens that there will be no need to pay any extra property tax this year.
In a meeting on Monday, the Senate Standing Committee on Finance Sub-Committee, led by Senator Mohsin Aziz, was presented with measures by Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial to combat the influx of illicit funds in the real estate industry.
3. FBR Bans Rs10 Million Property Purchases Without Tax Disclosure
According to the chairman of FBR, the committee was informed that the government has made the decision to put an end to the use of unreported earnings and possessions. A significant measure has been taken to prohibit the acquisition of properties valued at more than Rs 10 million through undisclosed income. It was mentioned that individuals will now have to disclose their income in their tax returns in order to carry out expensive property transactions.
According to Langrial, the majority of property transactions in Pakistan, specifically over 97%, have a value of less than Rs10 million. The board’s focus is on the 2.5% minority that participates in high-value real estate transactions.
According to him, a majority of unreported funds and assets are channeled into the real estate industry.