Negotiations held between the government and representatives of real estate associations on amendments proposed in the Income Tax Ordinance 2001 have been successful. The government has taken back almost all of these amendments and has shown a willingness to levy new taxes that would be finalized after consulting the stakeholders.
While the criticism stands true that amending the FBR’s attempts to stop black money from entering the market and seeing a tremendous gain on the original amount isn’t something a sane mind can support, it is also true that introducing such a massive revamp on such urgent basis and not expecting to face any resistance would be equally insane.
What surprises me here is that these negotiations weren’t prolonged unnecessarily. You see, when it comes to money matters, we can all show flexibility. For instance, if the intention to block the black money through these tax amendment can cause a sudden and sharp drop in terms of sale and purchase activity seen in the real estate sector, implementation of these amendment will certainly have even more serious repercussions, which means that the huge tax income collected from the real estate sector by the FBR will dwindle. Not just this, but the flight of capital can very well make things worse for the country’s economy.
Per news shared in local press and news media, the Federal Board of Revenue (FBR)’s proposal to determine fair market value of real estate through State Bank of Pakistan’s valuators has been turned down by the Finance Minister Ishaq Dar. According to details, the FBR is also not going to hold any audit of real estate transactions recorded in the past. The new means to determine the fair market value of real estate will stand valid for one year alone. In other words, rates will be increased, per the set formula, each year.
Dar has invited the property dealers to share fair market value chart from 18 cities with the FBR in 5 days. This chart will help the FBR determine the property rates throughout the country. In the next meeting, which is scheduled for July 27, 2017, dealers will share their findings with the FBR. It is quite likely that the fair market value from these 18 cities will suffice to assess real time market value of real estate in the country and thus be acceptable for the FBR.
Per the news slide relayed by the local news channels, real estate builders and developers, who perhaps wish to not pay increased taxes on the commercial and residential units they deliver in the form of their real estate projects, have also called for a meeting. It is likely that they will demand similar amendments in the taxes that are being imposed on them. So let’s see what we get out of that meeting.
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Government was not rollback on 0.6% tax on Bank Transaction Issue with merchants it was also big money matter, ….And now how they rollback on property valuation issue ? 🙂 , So how they will reveal black money from investors, Dar > where is the mission?. and What happened to CGT, Gov CGT is remain 10% or it’s also rollback to null? 🙂
Thanks Ms. Samra!
Its good News, i would like to say once again Taxing in such way have nothing to do with black money there are other ways to stop black money (If they really serious to do so :P)
Hi, there is so much ambiguity, could you please explain the current applicable taxes and respective rates for transferring the property in karachi. thanks
In all discussions we hear the term “stakeholder”, but are honest tax paying people with white money not a stakeholder? And who is fighting for thier right to own a house in thier lifetime? What is the purpose of real-state business? Is it money-making only or to provide housing to citizens? If the government cares about common people then it’s policies should primarily aim to bring down the artificially inflated prices. The money-making is secondary.
means no negotiation on the CGT 10% tax reversal, the tax will still be there ?
Wrong information continiously being spread! Paid stuff
The Finance Minister does not have the authority to ‘reject FBR’s proposals on valuation’ as stated in the article. This is now law, as it was passed by an Act of Parliament, and cannot be overruled by the Min of Fin unless the law is amended through another Act.
Which I am sure it will be, as we all the entire system is rotten and resists any measures to reform it.
so keep taxing the salaried class. they pay as much as 25% and companies pay in 30%. why not 10% for the real state owners. The more we delay reforms in the tax laws and real estate sector, the more we reduce the possibility of a common man being able to afford the house. In the long run, this baloon type market is bound to crumble.
We are very innocent,we always believe what govt. or her spoke person says.
In the matter of real estate , they making fool to the dealer’s representators. Actually nobody has to deviate from the draft handed over by the IMF/WORLD BANK to arrange funds from real estate sector by leaving unjustified tax on real estate.
So no use of meetings.