The task force dedicated to revitalizing the real estate and construction sectors has completed its recommendations, which the Ministry of Housing has now forwarded to the Federal Board of Revenue (FBR).
A key recommendation allows non-filers to purchase properties valued up to Rs10 million, broadening the real estate market to include more participants and stimulate growth. Additionally, the proposal includes a significant reduction in tax rates on property sales under Section 236-C, easing the entry of non-filers into the property market.
The proposed tax adjustments will halve the capital gains tax from 3% to 1.5% and reduce it from 4% to 2% under the same section. Furthermore, the proposal suggests cutting the tax on property purchases under Section 236 from 3% to just 0.5%.
Read: Pakistan Imposes New Banking and Purchase Restrictions on Non-Filers
These changes will likely lower the overall tax burden on property transactions, which ranges between 11% and 14%, to 4% and 4.5%. Such reductions will likely make property investment significantly more attractive and accessible, especially for overseas Pakistanis, who will benefit from easier access to property investments through an online registration facility provided by NADRA.
Moreover, the proposals permit filers to declare property worth up to Rs50 million in their wealth statements while maintaining a cap of Rs10 million for non-filers. These measures aim to invigorate the real estate sector and attract domestic and international investment.
