Islamabad: The Pakistan real estate sector has demanded a change in the real estate tax structure along with the transfer of the decision to determine property evaluation from the federal government to provinces, news sources reported on May 31.
In a letter written to the federal government, the realtors have asked the government to reform the real estate sector to boost its share in the economy. It was suggested in the correspondence that the provincial governments have the infrastructure and field force to collect taxes and evaluate property taxes as opposed to the federal government’s capacity.
Similarly, the realtors also suggested that federal taxes such as capital gain tax and advance tax be calculated as per the DC rates determined by the provincial government. Moreover, the realtors also suggested the following changes in the tax net and calculations in order to make it beneficial for both the clients and the realtors:
• Advance income tax should be reduced by 0.25% for filers (presently paying 1%) and should remain 2% for non-filers.
• Capital Gain Tax-(236-C) for the immovable property be reduced to 0.75% for filers as opposed to the present rate of 1% while it should remain at 2% for non-filers.
• The maximum time for calculating gain tax may be reduced to three years rather than four, with a flat rate of 5%
• Creation of Real Estate Regulatory Authority RERA to improve the management and address issues of the realtors and industry, the pending bill for the creation of RERA be approved
• 50% reduction be announced in property transfer/registration of authorities/societies such as CDA/LDA/KDA/Bahria-Town/DHAs membership, transfer, possession and site plan
• Increase in service charges (commission) of realtors: By directing all registration/mutation/transferring authorities and societies, the government should enhance and legalise a 2% commission from the buyer and seller, as well as a one-month rent on lease/rental deals from each side
According to realtors, the real estate industry has the ability to help the economy, and its issues should be addressed in order to boost growth.
Nauman Ahmad is an imaginative Pisces whose love for literature and nature is unparalleled. When he's not reading or hiking, he's sleeping and eating, which gives him plenty of energy for his next adventure.
