Islamabad: The Federal Board of Revenue (FBR) Chairman Rashid Mahmood has agreed, in principle, to revisit high property transaction taxes, aiming to support the construction sector and affordable housing initiatives. During a Taxation-Task Force meeting, stakeholders highlighted the 13% tax burden from sections 236C and 236K of the Income Tax Ordinance, 5% FED, and 4% provincial stamp duty, which have reduced transaction volumes.
The Chairman proposed reducing these taxes, subject to provincial agreement on not raising their rates. A committee, led by the Member Policy FBR and including key industry figures, was formed to draft tax rationalization proposals and fiscal measures for affordable housing.
The meeting also discussed aligning property valuation rates with market values through annual reviews to enhance transparency. To streamline processes for overseas Pakistanis, an online verification system will replace field office dependency.
Concerns over the income tax on deemed income under Section 7E, especially its impact on idle plots, were raised. The Chairman agreed to review its definitions and potential double taxation issues.
The finalized relief package, expected by February 2025, is likely to include tax reductions, incentives for first-time homebuyers, and measures to boost real estate activity. Experts are optimistic about the reforms’ impact on the sector’s growth.
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.
