Islamabad: The Federal Board of Revenue (FBR) has decided to set up a Directorate for Immovable Property (DIP) to stop under-declaration of immovable assets, reported a news source. An Appellate Tribunal will also be formed to sort issues related to tax applicable on properties.
In this regard, a new section 230F has already been introduced in the Income Tax Ordinance 2001, which states that a Directorate of Immovable Property will have a director general (DG), several directors, additional directors, deputy directors, assistant directors and all concerned officers and staff members. This directorate will have the authority to buy any property that isn’t registered according to the open market rate.
The directorate will also decide on procedure, mechanism, and terms and conditions for buying properties of those who under-declare the value of their immovable assets. As per the news report, the DG DIP will have the power to initiate the process to buy property from anyone by paying an amount higher than that fair market value determined by the valuation expert appointed. The DG will also hold the authority to appoint a valuation expert for determining the fair market value of property at hand.
Under a sub-section of the document, if the property value is documented at rates lower than the fair market value determined by the valuator, a written explanation will be required. In addition to that, no proceeding will be carried out six months after transfer, registration and record verification of the immovable asset. Furthermore, legal action will not be taken against the one transferring his property without giving him a chance to pursue the case. And objections raised by the DG on the transferred property will also be shared in writing.
Appeals on cases regarding taxes on immovable assets will be submitted to the Appellate Tribunal. The rules to appoint the head of Appellate Tribunal, his powers, functions, and the mechanisms to deal will cases filed with the tribunal will be introduced later.
In this regard, the FBR has proposed that proper legislature be introduced in the Finance Bill 2018.
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.
