KARACHI: Real estate industry has urged the government to reduce withholding tax to one percent from the existing two percent on the purchase of immovable property by income tax return filer.
In case of sale of property, the withholding tax rate should also be reduced to 0.5 percent from the existing one percent, it suggested.
Pakistan Real Estate Investment Forum (PREIF) submitted its proposals for the upcoming budget 2017/18 to the National Assembly’s standing committee on finance and said the existing rates for non-filers should be kept intact.
Shaban Elahi, president of PREIF, in a statement issued on Thursday, appealed the government for further facilitation of real estate sector by enabling business-friendly environment so that the local and foreign investment could further be increased.
Demanding friendly federal budget for the real estate sector, he also urged the provincial governments to reduce provincial taxes such as stamp duty, capital value tax (CVT), town tax and registrar fee in order to minimise transactions costs.
“It will not only benefit the consumers, but a large number of people will opt for documented transactions, instead of resorting to general power of attorney, which prompts disputes,” he added.
At present, the rate of provincial taxes on stamp duty is two percent, CVT is 2.5 to three percent, town tax one percent and tax on registrar fee is also one percent.
“Total rate of taxes in the province is around seven percent, which needs to be brought down,” he added.
