ISLAMABAD: Federal Minister for Finance and Revenue Miftah Ismail assured real estate stakeholders that their proposal about capital gains tax would be considered by the government.
The minister was meeting a delegation of DHA Estate Agents Association headed by Chief Patron Mian Irfan.
The minister assured the delegation to consider the relief in terms of capital gains tax. He directed the Federal Board of Revenue (FBR) to formulate a separate mechanism for facilitating the non-filer overseas Pakistanis to revive business activities in the economy.
Highlighting the proposed taxes on the real estate, the minister emphasized the real estate sector to contribute in the economic development of Pakistan.
The finance minister assured the delegation that government would consider their proposals for the economic betterment of the country. The delegation thanked the finance minister for cooperation and support.
On the occasion, the delegation discussed the proposed taxes on real estate and presented suggestions for the promotion of economic activities in Pakistan.
The delegation also included Senior Vice Chairman, Umar Afzal, President DHA EAA Mian Talat, General Secretary DHA EAA, Sarfraz Hussain, and others, the statement added.
In the budget, the finance minister had announced that people having more than one immovable property worth over Rs25 million in Pakistan shall be deemed to have received rent equal to 5 percent of the fair market value and shall pay one percent tax
Amid reservations, the minister agreed to change the tax proposal and not to impose tax until the plots were developed and suggested to bring in some time frame before the application of tax.
He said the objective was not to collect money but to turn real estate into productive investment and encourage development.
A day earlier, Miftah was asked about proposed taxes on property. He said that once construction begins on an empty plot, it will be exempted from taxes.
The finance minister said if permission has been granted to start construction on a piece of land but has not commenced then taxes will have to be paid.
In the budget, the finance minister proposed a 15% capital gains tax on immovable property for a one-year holding period which will be reduced by 2.5% every additional year.
Moreover, he had also proposed advance tax on filers to be increased to 2% from the previous 1% on the purchase of property and non-filers 5%.
Miftah said the tax system had resulted in artificial price hike in the real estate, making housing facilities out of the reach of the middle class.
“We don’t want to discourage the real estate sector but we want to steer this sector in a direction where it can become the engine of growth for cities. Our proposals aim at encouraging construction, and vertical growth, and discouraging speculative investment in open plots,” he said.
