Federal Board of Revenue (FBR) Member Inland Rehmatullah Khan Wazir had a meeting with realtors on Thursday January 26, 2017. Some interesting facts were shared in this meeting. According to Wazir, the property tax collected between July 2016 and January 2017 is 74% higher than the tax collected from the property sector during the same time period of the last fiscal year. Reportedly, the number of property transactions registered between July 2016 and January 2017 was also higher.
Addressing the meeting, Wazir said that amendments in the Income Tax Ordinance have left good impacts on the property sector, as the number of property transactions recorded during the first seven months of the current fiscal year was 116,000 compared to 106,000 recorded during the same time period in the last fiscal year. He also shared FBR stats regarding the total property tax the board collected in these seven months. According to him, PKR 7.3 billion was collected from property transactions in 6 months. This figure was PKR 4.2 billion in the corresponding months in the last fiscal year.
Talking about the major concern of realtors, Wazir said that the anomalies in the valuation tables will also be removed.
To register their concerns about these anomalies, Pakistan Real Estate Investment Forum (PREIF) was also part of the meeting. PREIF President Shaban Elahi, who also contributes to the Zameen.com Blog (click here to read his blog), urged FBR to remove all discrepancies in the valuation tables as the anomalies are preventing the growth in property trade activity in the country.
While PREIF agrees that the amendments made to the Income Tax Ordinance 2001 have brought along a rise in property transaction volume with real estate investors once again finding interest in the property sector, removing the anomalies in the FBR valuation tables can fix the dropped investment volume in certain localities including DHA City in Karachi, DHA Valley in Islamabad and many areas in Lahore and Peshawar.
Elahi highlighted the fact that due to the higher rates mentioned in the valuation tables, transaction cost in these societies is discouraging investors. He is of the view that tax revenue collected from the societies for which FBR valuation tables quote higher values than the market rates can increase if the tables are fixed. Members of the meeting agreed to his point of view and quoted similar examples from different localities in Faisalabad.
Towards the end of the meeting, it was decided that a committee will be formed to look into the matter and find a workable solution to address this issue. Reportedly, Mian Abdul Manan, Makhdoom Syed Mustafa Mehmood, Sheikh Fayyaz Uddin and Muhammad Ali Rashid will be the members of this committee.
As and when more information becomes available in this regard, I will update you about it. Meanwhile you are welcome to share your opinions with fellow readers by commenting below.
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hi, its a nice read.
Hi, its a nice information. Looking forward for the property hike again!
No good!!
New property tax regime has has brought misery and lively hood of nanny real estate agents
so I heard!!!!
Whatever statistic FBR is presenting is completely false!
Excellent coverage of the meeting between FBR and PREIF officials. I wish some day soon, Samra could write to explain how white money becomes black when a property is purchased. The Agreement between the buyers and sellers is almost always made on DC value, perhaps due to the fact that the provincial governments collect 2% CVT and 3% Stamp Duty on either the DC value or the value used in the Agreement, whichever is higher.
you are absolutely right if property is purchased at higher rate than DC value and registered at DC value ( which usual) then when you sell the property again its sale is shown at DC value ( which is usually much lower than the actual) so you have the money with you for which you have no documented proof.This is because of higher tax rate plus so many taxes e.g stamp duty,CVT,Withholding tax,Local Govt tax (TMA),Covered area tax, registration fee etc. They discourage the buyer to declare the real purchase value. Solution is single tax to be charged and be shared among different bodies, and total rate of tax be not more than 2-3 % of the total value. The net result is that you have to wait for next amnesty scheme where you can whiten your money by paying only 1% or so.
Dear Fuzail,
I haven’t covered this black and white money thing but PREIF President Shaban Elahi did.
https://www.zameen.com/blog/misconceptions-about-real-estate-sector-of-pakistan-the-other-side-of-the-story.html
Please check and let me know if it is what you were looking for.
i think this is a fake figure given by member FBR
we are suffering worstly for the last 6 months in real estate sector