Real Estate Industry Demands Tax Reforms in Pakistan’s Budget 2024-25

June 5, 2024Zayn0

Pakistan’s real estate experts have submitted budget proposals to Finance Minister Muhammad Aurangzeb for the fiscal year 2024–25, according to an ARY News article. Real estate specialist Ahsan Malik asserts that for the past two years, the sector has suffered enormous losses.

Recommendations for Tax Reform 

Lowered DC Rates 

Malik suggested that in the next budget, the Pakistani government reduce DC (Developmental Charges) rates by 33 per cent to reflect the property’s genuine market value.

Income Tax Refund on Land Sales 

Malik insisted that the 3% income tax on land sales under Section 236C be eliminated. In the budget for the upcoming fiscal year, he also proposed reducing the income tax to 1% on the sale of real estate and flats under Section 236C.

Tax Rate Reduction for Non-Filers 

The real estate expert recommended lowering the tax for individuals who fail to file their taxes under Section 236-C from 10.5% to 6%.

Breaks on Taxes for Widows 

Malik also suggested that widows should be eligible for special tax discounts if they purchase property but do not file taxes.

Goals for the Proposals 

Ahsan Malik claims that these recommendations’ main objectives are to halt capital flight from Pakistan and revitalize the country’s faltering real estate sector.

IMF Negotiations

According to reports, Pakistan failed to persuade the International Monetary Fund (IMF) during their most recent talks to include the steps required to tax the real estate industry. Pakistan’s request to increase taxes on the sale and purchase of plots for non-filers has been approved by the IMF mission.

Possible Effect on International Investment 

Ahsan Malik has issued a warning, stating that higher real estate taxes will drive more foreign capital out of Pakistan. He thinks that to keep the nation appealing to international real estate investors, the proposed tax revisions are essential.

In Summary 

The proposed tax revisions are meant to alleviate some of the severe difficulties that Pakistan’s real estate industry has been facing lately and help to revitalize the business. The rehabilitation of the sector and the nation’s general economic health will depend on the finance minister giving these recommendations careful thought in the next budget.

Zayn

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