Islamabad: Prime Minister Shehbaz Sharif is set to review a major package for the housing and real estate sectors on Thursday (Feb 6), which includes significant tax rationalization measures and policy reforms aimed at stimulating investment.
According to sources, the Prime Minister will chair a high-level meeting where recommendations from the task force on housing will be discussed. The meeting will focus on finalizing a growth framework and improving financing accessibility to address critical challenges in the sector.
The task force has proposed key tax relief measures, including waiving Section 236C (2A) related to 7E declarations and commissioner approvals and providing basic exemptions for properties valued up to Rs 10 million. Additionally, it has recommended abolishing Section 7E of the Income Tax Ordinance, which has been a major concern for real estate stakeholders.
To streamline property transactions, the task force has suggested shifting non-resident property verification to an online system via NADRA and implementing a uniform tax rate for filers and late filers to remove disparities. The recommendations also include standardizing stamp duty rates across provinces and Islamabad Capital Territory (ICT), abolishing Capital Value Tax (CVT) in Islamabad, and ensuring uniform taxation policies through the National Tax Council.
In a bid to boost investment, the task force has advised waiving wealth reconciliation requirements for real estate investments up to Rs 50 million. It has also proposed revising property valuations every three years to align with market prices and introducing tax exemptions for specific categories, such as low-cost housing, government plots, and first-time homebuyers.
Short-term measures under consideration include reducing the policy rate to a single digit, resuming the Mera Pakistan Mera Ghar (MPMG) scheme to restore developer confidence, reintroducing mark-up subsidies for low-cost housing loans, launching financial literacy programs, and encouraging mortgage financing options through real estate developers. The recommendations also include the introduction of low or fixed-term loans for periods like 5, 10, and 20 years to enhance affordability.
The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has been advocating for reducing real estate taxes to single digits to stimulate investment and improve market activity. The upcoming meeting is expected to finalize reforms that could significantly impact Pakistan’s real estate and housing sectors.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
