What is the impact on real estate market after amendment in tax laws to streamline real estate investment,implementation from july. Property price to be fixed on market value for tax.
1 Like
It would not be on the selling rice rather it would be applied on profit…It is nothing more than a desperate measure as it would result in under invoicing and more black economy.
1 Like
There is another catch, if you under invoice, govt has the power to buy from you at market price
http://e.dunya.com.pk/detail.php?date=2016-06-29&edition=ISL&id=2457058_13470680
1 Like
A horrible move for the property market
I think real estate boom is over for now…
Ishaq Dar is becoming a curse. First he destroyed textiles by keeping rupee appreciated, now he will destroy real estate. Selling or buying will become hard with added procedure. The argument is made that manufacturing will increase but how? There is no electricity in the country.
Dar is munshi and will remain a munshi. Government problem is revenue which can be resolved very easily by implementing flat minor tax rate on different properties. In reality, we just have to give some money to FBR evaluator and thats it.
I wonder what will happen to DHA now , 1 kanal plot in Lahore =1.5 TO 2.5 crore or plus= how much taxes , 4 or 5 lakhs or more in a single sale/purchase deal , so will it deter the the investors/dealers gambling in market now?
good for state , good for genuine buyers, BUT BAD for investors / dealers or fraudias.
Real estate prices will comedown .no doubt about that ,in twin cities the fast running horses(DHA/GULBERG/ZONE2 /CDA SECTORS) will realize the thunderstorm ahead , and so will slow down or change the direction in order to avoid the sudden fall(bcz the ballooning in these areas is due to dealer mafias(presumed so), DHA is the only exception upto some extant(bcz of increasing house construction activities ) , but again its prices will also comedown ,as its the gray wolf of current rulers......."If you run from a wolf, you may run into a bear.” –
@ DK…Sir i tend to differ in this regard…Prices may become stagnant but seems highly improbable that they may come down in genuine areas of zone 1 and dha 2 which has genuine demand…Yes smaller properties would now be the target of the investors.Also there is no other business heaven in Pakistan…After having a rational analysis, one can easily see that there is no other opportunity but to invest in real estate. Yes at the places where dealer mafia played its role such as bahria etc, they are already facing the music. Btw i am seeing that the E,F series of CDA may become the largest victim due to the fact that CDA has already banned the commercial operations in these areas plus diplomats are also being vacated to diplomatic enclave and now this decision.
Actually, currently there is a lot of confusion in the market about the implementation mechanism of the proposed new taxation system. The things will be clear in the near future once the government will decide about the practical implementation and property valuation system across the whole country. In my personal view it will take some time, may be 6 months or more. The impact will be definitely negative on the overall real estate market.
However, things will come to normal with passage of time. People will try to find ways around the new system or they will try to find new avenues and venture areas.
In the long run, people will go along with the new taxation system. It will decrease the profit margin, but still the alternate options are not that good for investments in PAK.
Regards
You are right khan bhai…No alternate venues for investment…
Thanks Saadi.
Welcome khan bhai…Btw what i personally see is it would affect expensive properties more and now people would have more trend towards smaller investments.
100% agreed. The devastating effect will be on expensive properties. Jis ne 10 ya 20 lac ka plot lena ya baichna hy, os pe koi khaas bara impact nhe hoga. I think this will boost the open file/ certificate game... Looks like a very good incentive to invest in files and avoid any tax or transfer fee. Lets see, how it goes.
Regards
Mjy to smjh nahe aa rahe jang newspaper mein likha hai is se log property se paisa nkal kr industry pe lgain ge or gdp increase ho ga , energy crises khtm yeh govt nahe kr ski , battein check kro .IMF krwa rha hai or 20 sal tk next jan nahe chory ga pakistan ki or hardworking people ko he apni aesi taesi pher kr qarz utarna pry ga lgta . We demand if they want to implement these taxes bring nawaz sharif to court , bring zardari to court get their corrupted money back ,no more loans from imf cut off army budget 40% then we will pay .
Yeh cheez.
Biggest question is why we will pay so heavy taxes to corrupt govt? , who gonna trust them that this money from taxes will be fruitful . Instead actually these money will go to IMF and ARMY , no more harsh taxes on middle class . Shame on govt
Yes, agree with Asad. At the end of the day, in any country, the taxation system rests on trust between taxpayers and state. In Pakistan there is zero trust because of the way the state spends or squanders our tax money. The state can keep coming up with a million new ways to tax us, but if it doesn’t reform itself, and if it does not establish trust with the taxpayers, then ‘We, the People’ will find ways to beat the state.
Plots costing up to Rs 3 million (30 lakhs) are exempt from payment of CGT. Therefore these properties are unlikely to be seriously effected by this measure and might actually see an increased investor interest. This is because possession plots always offer more security as compared to files.
Simple , gov wants money, and is desperate to search for cash .
Our budget is eaten by external debt ( 1500 billion rupees in interest for sins not committed by common man /year) and the gov employees salaries plus gov non developmental expenditures( lush push lushakakaray on our blood and sweats amounting to 600-700 billion rupees,so total 1500+ 700=2200 and what about corruption and new loans for corruption in mega schemes, in NUTSHELL we need borrowed money even for the employees salaries . SORRY I INCLUDED GOV EMPLOYEES HERE, BUT ITS A FACT," gov employees are a burden on our state , consuming more and out put is negative, e.g gov schools/ railways/PIA/health etc.
Our total income is below 3000 billion rupees and that is again by cruel extraction via indirect taxis.
Now ,as there is nothing left to extract ,so they are after real estate ( which is to be fair not wrong at all), BUT ,why market value taxes on developers/builders and investors in plots only...........WHY NOT tax the 10000 acres plus farms and lands of iron stiff neck demons ,and their farmhouses in DIRECT TAXES .......
impose 2 % taxes on river fed lands of more than 300 kanals in sizes , reform the agricultural area , relieve small farmers from taxes and give them incentives , on the other hand put the responsibility on heavy elephants.
Bind the sugar mils crooks to purchase from small farmers at lower fixed gov rates and put taxes on these mills and also reduce their profit margins from 200% to some reasonable 15-20% by reducing sugar prices in market and placing 5-10 % additional taxis on sugar mills profits.
BUT this is nigarkhana , where only dollar men are entertained , and NOW A DAYS THE dollar men are industrialists and factories owners ,and that's why they want money diversion from all areas in one direction only....... And everyone knows that direction.
"''The fox changes his fur but not his habits.”"" –