Islamabad: The federal government has proposed to increase the valuation rate of immovable property in the announcement of the Budget 2019-20, a news source reported. The budget revealed proposes to raise this rate up to 85% of the market value. Additionally, no capital gains tax (CGT) will be payable for property held for over 10 years.
Currently, the Federal Board of Revenue (FBR) has issued valuation tables of immovable properties in 21 cities, where such properties are valued higher than the Deputy Collector (DC) rates. Also, individuals buying the properties are required to pay a 3% tax on the difference between the DC and FBR values for the purpose of explaining the source of investment.
According to sources, the FBR has still noted rates that are lower than the actual market value. To amend this problem, the government has proposed to take the FBR rates on immovable properties closer to or at least 85% of the actual market value. Additionally, it has proposed the removal of the liability of paying 3% tax for not explaining the source of investment.
Under the new budget’s policies, the government requires individuals to purchase assets through banking channels. Individuals buying an immovable property at fair market value of over PKR 5 million or any other asset of PKR 1 million or more will have to pay through a crossed banking instrument. This measure will help clearly identify transactions from one bank account to another, and ascertain their sources.
