Govt expected to give relief on Property Transfers

The government is being advised and suggested by the task force created by the government called the Government Task Force on Housing Sector, which has advised the government to lower the taxes on property transfers and allow non-filers to contribute to tax by relaxing the limitation proposed by the FBR in the new Tax Amendment Bill 2024.

The task force has advised the federal government to remove Section 7E from the FBR ordinance to make property transfers and property prices more attractive, and they have also advised removing the Capital Value Tax (CVT) as well, so that Islamabad property can compete with the rest of the city's property prices. 

The task force has advice to remove subsection 2A for properties up to 10 million rupees, which will attract investors. It is reported by Profit.PK that property transfers have dropped to 50% compared to last year, and they said that many people are now looking towards power of attorney kinds of options for transfers of properties to avoid FBR taxes.

It is reported that the government is likely to accept the government task force on housing sector advice and their suggestion. The government will reserve and rollover FED taxes on properties to boost the economy and to increase taxes, as it seems that increasing taxes on property did not help the government and, in fact, it reduced the property transfer/sale and purchase, which used to generate taxes for the government and help the Government in the recent years cover taxes shortfall of FBR.

The FED ranges from 3% to 7% on the gross amount. 5% will be charged on the gross amount if the purchaser has not filed his/her income tax returns. Moreover, the person has to pay 7% FED for purchasing property on the gross amount if he or she is not a filer.

The government is likely to take back FED charges on property to increase the purchase and sale of property transfers and boost FBR taxes to meet IMF targets for fiscal year 2025.