Real estate agents in Lahore are staging a protest today against the new tax regime. Agents from all parts of the city have planned to reach the Assembly Hall in form of rallies and register their concerns against the new tax mechanism, which has reportedly brought down the real estate transaction volume by 80%. In today’s protest, real estate agents from Karachi, Islamabad, and Peshawar will also show up, illuminating the fact that the new taxes affect them all in a similar manner.
After conversing with numerous people from the industry, I have learnt that property agents and consultants from all over Pakistan are on a single page about these taxes and consider them unjustified. Today, the agents have taken their coordination one step ahead after collaborating for similar rallies and sit-ins that were held quite recently in other cities. One such protest was held on October 16, 2016 in Karachi. Today’s protest in Lahore is part of these collective efforts, and agents plan to get together in Islamabad on October 27, 2016.
The effects of drop in real estate transaction volume are being felt far and wide across the country and in the coming few weeks, we would be able to have a clear understanding of how industries related to the real estate sector are being affected. In DHA Lahore alone, many real estate agencies have closed their offices as bearing the rent and related expenses in the absence of any business activity is no longer possible for them. Lahore Development Authority (LDA), too, faced a loss of PKR 130 million in one month after the new tax regime was implemented, making it hard for the authority to manage its expenses.
The basic philosophy behind increasing the tax percentage was to track untaxed money that has apparently made the real estate commodities fall out of the reach of common buyer. The Federal Board of Revenue (FBR) obviously intended to bring this money under the tax net.
Well, it has certainly discouraged property flipping by making property investors wary of the new taxes, property rates have also gone down in almost all major housing societies across the country, but this has unfortunately failed to convince genuine property buyers to step forward and make use of the dropped real estate rates and help shorten the housing shortfall in the country.
Today, almost 3 months after the implementation of the new tax regime, the revenue collected from property trade and transfer is about 80% lower than that collected before July 1, 2016. Many real estate brokers, who get their commission from property buyers and sellers, have been almost idle for the last 3 months. They have now decided to start protesting against the new taxes and use their collective influence to make the government restore the old tax regime or bring the rates mentioned in FBR valuation tables down.
Looking at how the situation has changed for these agents, who solely depend on real estate transactions to earn their livelihood, I suspect that their protests can gain momentum. Considering the present political scenario, I hope the authorities concerned don’t deem such agitation buildup as a good sign, especially from influential folks from the real estate industry.
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THE BROKERS N DEALERS R JUST TRYING TO BLACK MAIL THE GOVT….THIS IS THE ONLY GUD THE GOVT HAS DONE IN ALL ITS YEARS IN POWER….A RAY OF HOPE FOR GENUINE BUYERS…NO PUBLIC IS STANDING WITH THESE AGENTS N BROKERS…IT IS ONLY THE PROPERTY MAFIA WHICH IS STAGING THIS PROTEST….THERE SHOULD BE A SHARPER DECLINE IN PRICES SO THAT GENUINE PPL CAN BUY THEIR HOMES AND PROPERTY IS NOT USED AS A SATTA COMMODITY…
fully agreed
Government should build cheap houses for common people instead planting TAX FOR NOTHING.
Agree with Rizwan, in fact new rules has put the restriction on brokers to manipulate the property values over night for their own benefits. Further other than commission dealers put big margin on sale value which they never disclose to seller and buyer and it goes straight to dealer pockets
Its is good that prises are going down for purchase of property so that a genuine people can get it
Actually no one trusts the government -. Once implemented these rates will rise and the revenues will be swallowed by corrupt leaders. If we had a trustworthy government , and the revenues generated could clearly be seen to be used for the benefit of the people, people might have less objections. In addition one should not assume that all DHA owners are money launderers – a huge number are hard-working people , often overseas, who are are desperate to own something in a safe(r) and secure area such as DHA and are willing to pay higher purchase prices for that reason – just as they do for purchases in good areas of other countries. The basic message is .. if you want an expensive plot, then work for it. Pakistan has vast amounts of land outside DHA and those that cant afford DHA should be assisted (by the government) to accquire affordable housing elsewhere.
Dear MAjab,
Property prices at the moment are event far reach out of exapts (pakistani’s people who are working in high posts in foreign countries). A person with 120K dollars salary per year cannot afford to build a house (land and construction) in DHA lahore at the moment. Real estate agents can still make the money by selling and purchasing the properties by earning their commission (1%) from each side, but yes properties transactions will be far less which actually reflects the necessity of house on afforadable pricing.
Best Regards,
Asif
Perfact answer is given by Majab. We are ready to pay taxes fr wslfare of country and deserving people of Pakistan . But the revenue ends up in offshore accounts.
NOT EVEN 1 GENUINE BUYER IS COMPLAINING ABOUT THE GOVT TAXATION POLICY AS IT HAS GIVEN HOPE TO US ALL THAT ONE DAY WE MIGHT GET OUR OWN HOME….IT IS ONLY THE INVESTORS N BROKERS WHICH ARE REACTING TO THIS…..WHILE BROKERS ARE NT EVEN JUSTIFIED FOR PROTESTING AS BROKERS WILL HAVE TO PAY NO TAX AND THIS TAX IN NO WAY DIRECTLY EFFECTS BROKERS….THIS TAX WILL BE PAID BY PPL WHO BUY HOUSES AND PLOTS AND NOT BROKERS, AND WHEN THEY DONT HAVE A PROBLEM THEN WHY THE BROKERS ARE HAVING A PROBLEM…THIS IS JUST TO PROTECT THE BLACK MONEY COMING IN THE MARKET AS MANY INVESTORS RELATED TO THESE BROKERS CAME IN THE MARKET AND WERE CREATING A HIGHLY INFLATED PRICE MARKET….
CAN YOU IMAGINE A 500YARD PLOT IS 6+ CRORE IN DHA KARACHI
OR A 300 YARDS PLOT IS 4 + CRORE…..CAN ANY MIDDLE CLASS BUY A PLOT OF THIS AMOUNT???
THIS WAS ONLY SPECULATIVE MARKET WHERE ONE PLOTS N HOUSES WERE MOVING FROM ONE BROKER OR INVESTOR TO ANOTHER BROKER….WHICH IS A SATTA MARKET
AS NO ONE WAS BUYING FOR LIVING AS NO ONE COULD AFFORD IT AS IN GENUINE BUYERS..
I HOPE GOVT DOES NOT BACK DOWN TO THESE BLACKMAILING OF BROKERS AND GENUINE BUYERS CAN GET THEIR HOMES…AND THERE IS A MASSIVE PRICE FALL EXPECTED IN 2 TO 3 MONTHS TIME…AS NO BUYER IN MARKET SINCE PRICE IS VERY HIGH IN MARKET WHICH IS UN AFFORDABLE FOR MIDDLE CLASS….SO MANY SELLERS AND VERY FEW BUYERS IIN MARKET
I have bought a plot in 26 lakh which the owner was not selling to me on 34 lakh, 3 month ago. I am thankful to Allah. Now i will build my own home.
As written in article that many real estate agencies have closed their offices and many others are going to close in near future
That will have negative affect on rent also as it is going to decline due to continuous closure of property dealer offices
If this trend of 1-2% monthly decline continues there will be 12-24% decline in price in a year
Should we start selling on loss?
Will there be any buyer even price are crashed ?
Totally scared that what will happen ?
For decades you have sucked blood and money of genuine buyers and sellers without putting a single rupee from your pocket. It is just a repay time for you guys.To hell with your rant and crying. Secondly prices in Karachi market are still inflated making it out of reach of a common man only due to your mafia.
I don’t understand why people are for the new tax on property. This sector employs hundreds of thousands of pakistanis if not millions of poor people in Pakistan from the builders to cement factories to the properties dealers.
The Pakistanis who live abroad who have already been taxed in there home country (ie white money) will stop sending remittance for properties so deprive pakistans economy investment also there will be no US dollars or UK sterling which are the life blood of Pakistan.
If the property sector goes down that will affect everyone even people who are poor if they live with there family that house will come down. Also if you save all your life you will have to pay a lot more taxes.
What about the people who have worked all there life and paid tax then finally bought with white money they will suffer now.
If there is a lot less buying and selling like there has been since 1st of july the government will get less tax not more.The people who use black money to buy property which is wrong will continue to do so but less frequently so it does not stop that problem.
There must be a better way a more fairer way other wise the normal people will suffer also it is bad for the economy. It means Pakistan is closed for business get tax but it must from every sector and not so excessive.
Maybe tax on your second property not on your first or property dealer can not charge what he or she wants transfer fees reduced for first property capital gains tax if it is over a certain level that would make it fair.
The overseas Pakistanis are not investing in Pakistan anymore or even buying one property for family because we need stability to invest in any sector we pay taxes in our home countries and we are happy to pay in Pakistan but government can change rules over night and the whole sector or economy can collapse.
Millions of Pakistanis will suffer because of the government tax changes the material makers the builders the shops who sell materials the workers in the real estate market the banks the employees of banks the list is endless.
Mr.. Kaz if you can come out of your well… I am an overseas Pakistan and want to buy a home for my family. After taking loan from a bank here for 5 years, I found that prices in Karachi are still way beyond my reach. Took further loan from 2 more friends and by the way, i didn’t by in DHA or something it is only in Maymar area so only due to these black market mafia, I had to suffer and now I will be repaying people for next 5 years of my life because I was afraid that this mafia will further increase prices and i will have to take more loans so please cut your rant that no oversea pakistan is investing. geniune guy is always investing, it is just short-term black profiteers who gets afraid.
The time since the new tax rules have proven my point the prices have not come down.
Market forces put price of property up in every country like population increase migration to big citys like Karachi Lahore etc.
I don’t see the property owners complaining. They are the ones to gain or lose the most. This is the first time they may have to pay taxes on the amount they they will actually be receiving. And, the government may get some additional revenues to run the affairs of the country.
We should now get rid of this property MAFIA. These people have looted a lot. And made impossible for genuine buyers to purchase or build their home. Little time back riding on a bike they have now luxury cars due to over profits. Situation has got to such an extent that they decide next day property rates before closing each day. Government should stick to these taxes and No Relaxation should be given to this Mafia. No No No.
My Story
Last Year i relocated to pakistan, planned to buy a plot in bahria town lahore.
The Vigilant sincere real estate agent suggested me a plot of 10 marla of 75 lac,
the same day it gone up to 78 lac , next day the agent alleged that market is so fast and its now on 80 lac. I took some time to think about it , after 2 days i had agent call that he has token money of same plot of 83.50 lac. If you give a offer above like 84 then we can have a deal with 1 percent commission .
I decided to trust on agent offer and bought the same plot @ 84 lac.After a week i got the good news that the actual price of the same plot was 76 lac ,and agents raised the artificial price of the plot.
Conclusion : I FOUND THE AGENTS ” A PACK OF LIES ”, AND IF THAT AGENT NOW ON THE ROAD DUE TO HUNGER THEN I DONOT FEEL SORRY FOR HIM
Sheraz
Your statement (NOT EVEN 1 GENUINE BUYER IS COMPLAINING ABOUT THE GOVT TAXATION POLICY AS IT HAS GIVEN HOPE TO US ALL)
So you have spoken to millions of Pakistanis around the world how did you do that I am fascinated you were able to speak to so many people who all backed your opinion.
dear kaz
have you seen any general public protesting????apart from the brokers??? can u show me one protest held by anyone at the press club or any forum of general public which is protesting???? go and find out first who is protesting and then raise this question…no public forum no genral public is on roads against this….it is only the brokers and estate agents who r trying to black mail the govt….
Kaz ask any geniune buyer how is suffered at the hands of these agents. Read comment of Sheraz above and myself and my other commenters that agents artificially inflated prices without telling seller or disclosing it to buyers and they kept large sum of money in his pocket.
I will try make it easy for you so you understand the general public will not protest until it starts to affect them this is a process give it time. When there is leader who comes forward and organises the general public. They will come out but only when they feel pain.
The government will change the laws again when the economic data comes in showing that they have collected less tax because the sector has come to a halt. Also when foreign remittance is continuously going down this country Pakistan needs foreign currency to live on a day to day basis.
When millions of Pakistanis will start to lose there jobs and lots of people will have to closes there businesses the general public will protest also the government will change there mind.
We live in a society that leaves there children property when these properties prices start crashing there will be a reaction.
I can go into lots of other points but alas don’t have time.
Please keep your useless and uneducated points to yourself. Except for black marketeers (in every field) there is no flight of capital in market. It is people like you who are crying for lose of profit over night.
The prices have not dropped, some peopl want Pakistan to fail.
foreign remittance is down, thousands of Pakistanis have lost there jobs but no one seems to care.
When overseas money stops coming to Pakistan which it has already has and the economy goes down with people out of jobs and no earnings, these people on this forum who are supportive of this regressive tax policy of the government, will realize that the property market supports not only the real estate sector but 50 other industries with it. The government is just trying to reap money and fill its own pockets at the cost of the economy. It will be detrimental to the economy if there is no buying/selling activity and the consequences of this is worse than having cheap real estate.
Don’t say “cheap real estate” instead say “real estate at natural prices” as these measures by government (only first in the whole time) will kick out black marketers, speculators and thieves from market in shaa Allah and we geniune buyers will have peace of mind.
IN SHA ALLAH TAHIR BHAI LETS HOPE AND PRAY MARKET CRASHES FOR THE GENUINE BUYERS
ARGUMENTS NOT VALID….AS THE GENERAL PUBLIC HAS NOT DONE ANYTHING WHICH YOU HAVE SAID…INFACT GENERAL PUBLIC IS VERY HAPPY THAT PRICES WILL GO DOWN…AND THIS WILL ALSO GIVE RISE TO VOLUME AND CONSTRUCTION OF HOUSES AND THERFORE EVERYONE WILL BE HAPPY IN THE LONG RUN
Yes because by “general public” you mean individuals who see things only for their own point of view and not for the economy as a whole. If overseas Pakistanis don’t invest in Pakistan and investors in Pakistan take their money to foreign countries the economy of Pakistan will collapse. I think people like you don’t mind if the economy collapses as long as there is a cheap house to buy.