As an expatriate do you pay tax on the plot you buy in pakistan? What if a d c inland revenue asks you to pay tax on the amount (remittances) used to buy the plot? It looks fishy to me. Could you please advice? Thank you!
No extra tax except general fees if purchasing is proved overseas remittance.
Why don`t you meet with any agent over there for confirmation? You should contact with an agent so that picture of property could be clear. If you want construction ideas and interior designing then I know many good Architects in Pakistan. It will be my pleasure to help you out in this. But for property question,meet with any agent in that area.
Waseem Malik Sb, you seem to be a thorough gentleman who wants to meet all legal and ethical obligations. You don’t have to pay any tax on your foreign remittances, and similarly no expatriate (of Pakistani origin) has to pay any income tax or extra fee to buy plot/house. That said, do you think that the truckloads of monies put in Pakistan’s real estate is tax-paid money? My personal guess is that not even 1% of such money is after-tax money!! Pakistan is the safest place and a paradise for tax evaders and for those with black money. The tax officials from bottom to top are all corrupt – no exception. In fact, these tax officials are the biggest hurdle in introducing a tax culture. So you need not worry, you pay or don’t pay tax, when your tax return in Pakistan comes under scrutiny you will have to bribe them.
There is no tax on remittance of funds into Pakistan whether for investment or for support to family or otherwise.
I fully endorse Khan Sahib!
Interesting question, I think the tax collection for property is based on the services provided by the Govt.; one needs to pay property tax ie; the home[a complete one as per authority books]; as the tax collecting authority assumes {Street lighting, sewerage/drainage, roads etc } amenities are provided to the citizen.
Residential, commercial, agri land I am not sure about it.
Waseem Sb: Rest assured, the money coming from abroad through banking channels is 100% legal and there is no tax payable on such remittances. You can invest such money into real estate or whatever sector you like without fear of any legal and/or tax complications in future. Good luck!
@Fasif: The topic under discussion relates to income tax, and not to property tax.
Thank you, all of you, greatly appreciated. Your comments are very useful. It was torturing experience dealing tax officials who took tons of time to understand that my status as overseas Pakistani and all my sources of income are from outside Pakistan. Salaries already taxed and money always sent through proper banking channels. But they tried their level best to not understand this simple thing.
Would you mind sharing your experience ?
Well Waseem Sb, tax officials in the land of pure become intelligent enough to understand everything in fraction of a second if you grease their palm appropriately. This way, they wouldn’t ask any question even if source of your money is drug trafficking. After all they are there only to make money. The bottom line, don’t go to them yourself but send someone who knows the art of dealing with them and you will have no issue.
Guys , i have been asked by a tax officer to pay him 100000 rupees for my plots i bought in islamabad. I had given them the details and proof of all my money that i remitted from abroad for the purchase of these plots but still they are not giving me a clearance letter for my plots. I am having i fight with myself and am not able to justify if i should bribe them or not.
Khalid, don’t bribe them at all because you bought the plots with halal money and the money came through proper banking channel. Try to communicate to them that you are not scared of them because everything you have is legitimate and halal and that in case of any excessive coercive tactics you will go to the tax mohtasib. See what their reaction is. If this does not help then you should consult a tax practitioner who will charge a fixed fee to take care of your tax issues. The same tax practitioner can also file tax returns on your behalf in future. Please rest assured that you will be the winner at the end of the day. I have been filing tax returns regularly since 1992, and since then I have never bribed them and sustained all their blackmailing tactics. They will try to scare you to death, but please stay composed and Allah will help you. Good luck to you.
For overseas Pakistanis:
1- Get your Remittance Card from the Pak Consulate / Embassy in the country you are residing.
2- Become a member of the OPF
3- Have a copy of your Work Permit / Residence Card
4- Transfer money to Pakistan through Banks
5- Provide it as proof if Tax officials demand tax.
Good luck!
CVT is still payable on purchase of plots, is it not?
No, it does not,
It depends in DHA you have to pay CVT Capital Value Tax on 1 kanal and sizes more than that plots, then in Bahria you have to pay CVT, but the rates are fixed, some societies don't ask to pay tax, so it totally depends where are you buying, no more taxes on any property purchase for people living abroad.
What other taxes do Pakistani residents pay other than CVT on a plot purchase?
There is a legal remitance tax imposed my government of pakistan for foreigners to buy properties in pakistan,however no one pays it.