Govt Planning to Charge Massive Taxation on Buyers and Sellers of Housing Society Files and property in the budget due to be released (2023-24) and to keep track of plots trading in private housing societies.
Sources have informed us that withholding taxes are avoided in private housing schemes. At the same time, trading plots are traded across the nation. The main target is registered property agents who are involved in business transactions that involve owners and buyers of property that is immovable.
Many private housing associations attempt to avoid tax by denying real transfers, and the trade of files goes on without paying taxes. To investigate these practices within the private housing scheme and prevent tax evasion, the FBR will adopt measures in the upcoming budget to verify buyers and sellers and ensure that taxes are paid.
The changes to the law would guarantee that taxes are paid on the sale and purchase of plots owned by private housing societies, and it will also provide that the property is documented as immovable.
The Govt Planning has raised taxes from 100 percent to 250 percent for property purchases not taxpayer active. In the event of the person who buys the property that is not listed as a taxpayer on the Active Taxpayers List, the tax rate to be taken under section 236K was increased to 250 percent of the tax rate stated in Division XVIII in Part IV of First Schedule. The change required has been included in Rule 1 in the Tenth Schedule to the Income Tax Ordinance.
FBR will release increased valuations for immovable properties starting July 1st, 2023. The FBR has begun updating property valuation tables all over Pakistan in consultation with provincial authorities.
The FBR has asked the top members of the Board of Revenues, Sindh, Balochistan, Punjab. Khyber-Pakhtunkhwa and Gilgit-Baltistan to issue instructions to the divisional heads/district heads for the nomination of representatives of the Board of Revenue for consultation/consideration with the teams constituted by the chief commissioners of Regional Tax Offices.
The FBR is working on the agenda of tax reforms. Specifically, Pakistan Raises Revenue Project (PRRP) under the supervision of the World Bank. One of the project’s most significant components aims to harmonize the valuation of immovable properties between FBR and the provincial governments/districts.