Punjab Budget more taxes
At least some stakeholders are taking up the case to prevent RE sector from sinking.
Some RE related changes in finance bill.
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In section 7E for tax on deemed income, the word “immovable property” will be replaced with “capital asset”. This is to prevent it getting challenged in the court. This tax will be applicable form tax year 2022.
(comments: apparently this tax is here to stay as opposed to my earlier discussions with tax experts who believed that apex court has already decided against wealth tax in the past, so this one will not see the light of the day.) -
Overseas Pakistanis who had a NICOP would be included in the list of active taxpayers so they don’t have to pay additional taxes on property purchases.
Changes
From Russia with Love !
It’s a good news that Shahbaz is exploring cheap and available Russian fuel. If we can get some LNG cargos from Russia it will keep our gas-fired power plants and fertilizer industry going. Otherwise, we are doomed…
It will be tricky to avoid pressure form the west amid looming FATF threat and halted IMF loans. If Shahbaz gets some breathing space, then his parwaz will be unmatched !
My post (above) came out first. Then Business Recorder wrote this editorial with the same title.
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Expensive Love
Apparently Russian love has some hidden costs.
MP
The measures announced in the Budget 2022-23 for the real estate sector are likely to have a mixed impact. The increase in advance tax on sale/purchase of property by filers from 1% to 2% and for purchase by non-filers to 5% may discourage speculative investments and may push investors to consider other investment options. This may result in a decline in demand for real estate, which could negatively impact the sector.
The imposition of 1% wealth tax on immovable property of value 2.5 crore or more could also discourage investment in high-value properties. The increase in the capital gain holding period from 4 years to 6 years and the reduction in the tax rate may also discourage short-term investments in real estate.
The high construction costs due to the exponential increase in the prices of cement, steel, and imported finish materials could also negatively impact the sector. The increase in costs could result in a slowdown in construction activity, which could in turn impact the demand for real estate.
The government’s focus on discouraging investments in expensive properties and encouraging investment in productive sectors may result in money repatriation to overseas or shift parked money into productive sectors. It remains to be seen how these measures will impact the sector and the economy in the long run.
Overall, the impact of the Budget 2022-23 on the real estate sector will depend on various factors such as the demand for real estate, the cost of construction, and the overall economic conditions.