Well, it has been done finally! A Standing Committee of National Assembly (NA) on Finance and Revenue approved an amnesty scheme for the property sector on Tuesday. According to this scheme, property investors will be required to pay 3% tax on the difference between the DC rate of property and prices declared by the Federal Board of Revenue (FBR) in its valuation tables to whiten their untaxed money. According to the initial details, this will be a one-time amnesty.
The NA standing committee considered recommendations of its sub-committee. The sub-committee had suggested the government charge 1% in total as Withholding Tax, Advance Tax and Capital Gains Tax (CGT) on property transactions. The committee also proposed that the government may charge 3% to 6% CGT on the FBR value of property or 1% CGT on the fair market value, whichever is higher.
On fixing valuation tables (a major concern of the property investors), the committee recommended FBR to immediately rectify the flaws with the consent of stakeholders. Reportedly, the government would incorporate these recommendations in the Income Tax Ordinance 2016 Amendment Bill.
The amnesty scheme was introduced as a result of the countrywide protests held by real estate agents and also due to a virtual halt in the real estate trade activity. The stakeholders concerned had also noticed a stark drop in real estate investment activity by overseas Pakistanis.
The new tax mechanism is bound to affect 50 industries associated with the real estate sector. Furthermore, the tax authorities have also noticed a sudden drop in the tax revenue collected from the property sector. In addition to that, capital flight to other countries has also been recorded.
In such circumstances, announcement of a tax amnesty scheme was deemed essential. We hope that the amnesty scheme will prove to be favourable for the property sector and will add certain transparency to the industry that contributes massively to the national exchequer.
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I appreciate valuable information.
Can you guide me, now
1- how much tax I will have to pay as a seller if I sell a plot of 10 Million.
2- How much tax I will have to pay to buy a plot of 10 million.
Thanks in advance.
Regards
Arshad
Good question for clarification. I think you have to pay 3% of the differnce in DC Rate and FBR value. This is what i know so far someone can clarify and confirm.
Thanks & Regards
if you want to pay the tax on the difference between DC value and FBR then you have to pay 3% on the difference and if you want to declare the property on its market value then you have to pay 1% of the market value
for more info please contact
mian irfan
o3214368157
Well Mr Arshad your first case will not affect with this scheme as it is only for property buyers.
Yes in second case ” How much tax I will have to pay to buy a plot of 10 million.” there are two scenarios
1: if u are a filer then its ok. No additional tax at all.
2: If u are a non filer then again there are two cases
a: FBR Value and actual purchased value is same i.e 10 million. No additional Tax as u have already paid taxes on transfer.
b: FBR value is 4 million and you paid 10 million. In this case you have to pay 3 % of tax on 6 million i.e the difference b/w FBR and fair market rate.
Hope it answers your question clearly
Good question for clarification. I think you have to pay 3% of the difference between DC Rate and FBR Value as per new Amnesty Scheme. This is what i know, if someone can confirm about this update, it will be great.
What about source of income question? Now the buyer does not have to show his source of income.
Can you please guide that now buyer does not have to declare source of income?
3% to be given to FBR in its valuation tables to whiten their untaxed money.
yes bro now you no need to declare the source of income any more just get benefit from this scheme
for more info please contact us
mian irfan
03214368157
some examples are required for buyer and seller for better understanding.
Some examples are required both for buyer and seller for better understanding.
thanks for such helpful info. can you please tell when would this new scheme apply?
Dear Team,
Could you please explain bit more ?
How much tax on sale or purchase of property of 10 m ?
Thank you.
As I have understood this is an amnesty scheme for black money. What happens to those who have white money, those who have been paying capital gains tax on actual sale prices and have complete record of properties bought and sold during past years ? Would their money be also treated as black money and asked to pay the same tax as those who are whitening their black/ ill gotten money ?
The Overseas Pakistanis, therefore would be facing double taxation, one in their country of work and the other in Pakistan, if they plan to invest in the real estates.
On top of it, they would have to convert their investments from strong currencies into weak Pak Rupees, resulting in to ultimate loss.
What a pity, Pakistan needs some sensible minds who could understand the impacts of taxation on the investments.
Dear Hussain Sb.
Your comments last line is appealing and appreciable. PAKISTAN AND PAKISTANIS REALLY NEED SENSIBLE BRAINS INSTEAD OF MINDS OTHERWISE THE GOVERNING MINDS WILL RUIN THE ECONOMY SENSELESSLY.
Difficult to understand the ishaq dar calculation
I have intended to buy a house and i m confused about black and white money after paying 3% money as amnesty sceme my moeny is convertd in white do i have to show my source
3% to be given to FBR in its valuation tables to whiten their untaxed money.
A shameful act by the Govt (including opposition) to whiten all the black money. An honest person has to pay upto 35% tak (and 70% if not paid within the due period), while those who sucked this cash using nefarious ways will have to pay only 3%.
Allah is watching everything.
What is the rate of 14 b dha kci
i need complete info abt tax on selling appartment in gulistan-e-jauhar, karachi.
Please send schedules etc. as well.
Thankx
It is not clear who will pay this tax, seller or buyer.? I will thankful writer could clarify this ambiguity.