The impact of Tax Amnesty Scheme 2019 on Property and Real Estate

The first tax amnesty scheme announced by the Pakistan Tehreek-e-Insaf (PTI) government has evoked mixed sentiments from the business community of Punjab. Tax Amnesty Scheme 2019 will have grave consequences in the real estate sector as the business community, accumulates the black money in the real estate market due to loopholes in the area.

The scheme has put a tax of 5% on Benami Assets (domestic real estate excluded) if declared before or on June 30 conditioned with liquidation and repatriation of assets into Pakistan. The rate will increase to 10% after the given date and to 20% after September 30.

Domestic Real Estate

How does the Tax Amnesty Scheme effect the Property Market?

• The scheme allows whitening of the undeclared domestic properties against just one percent of the tax.
• The tax will be 2% for declarations between June 30 to September 30 and will double down to 4% between September 30 to December 30.
• A three percent tax will be charged on the undisclosed sales.

Apex Opinion

Tax Amnesty Scheme 2019 will definitely be a welcome step as in earlier amnesty schemes, many people got their money legalized without actually showing their assets, i.e. they did not show either they had cash in hand from the property they sold or they possessed the property. But the new scheme declared by PTI government will enable investors to show receipts of cash in banks or property documents before actually getting the relief via the scheme. This sounds like an authentic guarantee of the white property remaining white and safe.

Dr. Hafeez Shiekh said the idea behind the amnesty scheme is not to generate revenue but to document the economy and to bring dead assets in the account. He added that the amnesty scheme was a golden opportunity for the businesspersons to revise their balance sheet.

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