Government enacts Rs 440 bn new taxes on real estate

The federal government has enacted Rs.440 bn new taxes on the real estate sector in the budget for FY 2022-23. In the media briefing, FBR Chairman Asim Ahmed stated that FBR has proposed to impose new taxes, including PKR 34 bn Custom Duties, PKR 90 bn Sales Tax & Federal Excise Duty, and PKR 316 bn Income Tax.

He also informed the FBR has put forward a proposal to give Rs.85 bn tax relaxation to the people in the coming fiscal year.

The chairman said there would be a 5% tax on income on non-productive immoveable & unused residential/commercial/industrial plots and farmhouses as well. The Federal Board of Revenue will allow exemption of one property, but it will deduct PKR 25 mn from the remaining open plots, producing PKR 30 bn in return.

In addition to other taxes, capital gains tax will also rise by 15%, and the holding period will stretch to 6 years, generating revenue of Rs.40 billion.

The FR Chairman said that an increase in advance tax has also been recommended on buying immovable property from 2%-5% for non-filers & to 1%-2% for filers. The federal board will collect Rs.65 billion in the coming year through this presented proposal.

In the case of Pakistanis living abroad, a 1% capital value tax will be imposed on their foreign liquid assets and immovable properties. This proposal will accumulate an estimate of Rs.18 billion in the pool of tax revenue.

For more information, contact Apex Group.