Govt orders new taxes of Rs440bn on real estate sector

Govt orders new taxes of Rs440bn on real estate sector

ISLAMABAD: The federal government has implemented new taxes of Rs440 billion on the real estate sector, in the budget for fiscal year 2022-23. 

Federal Board of Revenue (FBR) Chairman Asim Ahmad stated in a media briefing that the new taxes include custom duties of Rs34 billion, sales tax and federal excise duty of Rs90 billion, and income tax of Rs316 billion. 

The FBR has also proposed to provide a tax relaxation of Rs85 billion in the next fiscal year. The net effect of the taxes would be Rs355 billion. 

There will be a 5% tax on income on non-productive immoveable and un-utilised residential, commercial, or industrial plots and farmhouses. 

The FBR will allow an exemption of a single property but it will deduct Rs25 million for other open plots, which will generate Rs30 billion. 

Capital gains tax will also increase to 15% and the holding period will extend to 6 years, which will create a revenue of Rs40 billion. 

The chairman said that FBR has also recommended an increase in advance tax on the purchase of immovable property: from 2% to 5% for non-filers and 1% to 2% for filers. Through this proposal, the board will be able collect Rs65 billion next year. 

Pakistanis living abroad will be subject to a 1% capital value tax on their foreign immovable properties and foreign liquid assets. This will bring about an estimate of Rs18 billion in tax revenue.