ISLAMABAD – Pakistani government is slated to announce major tax cuts on high-value property transactions in the latest bid to push the market as tax reforms and anti-money laundering measures are seen as much-needed steps.
As Pakistan’s real estate remains in limbo amid a plethora of taxes, the proposed changes would include slashing taxes on properties worth over Rs100 million and cutting advance tax for filers to less than 1 percent – which now stands at 4pc.
In this regard, several proposals are being considered for these tax reductions, with Prime Minister directions to accelerate the process. The aim is to create a more favorable environment for property transactions and encourage investment in the sector.
Before finalizing the cuts, the government intends to consult with the International Monetary Fund (IMF) to ensure the tax adjustments align with the country’s broader fiscal objectives.
Lately, Excise and Taxation Department announced property tax exemption for plots and homes valued up to Rs50lac. This move follows approval from Punjab cabinet and establishes that future property taxes will be determined based on district collector rates.
The government also moved to block undeclared income in purchasing properties worth more than Rs1crore. Under the new plan, individuals will be required to declare their income in tax returns for any high-value property transaction.
As over 90 percent of property transactions in South Asian nation are valued below Rs1 crore, authorities are focusing on 2.5pc of high-value transactions, which are often fueled by undeclared money.
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