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Real Estate related budget 2016-2017

+1 vote
asked Jun 3, 2016 in General advice by hamza (1,340 points)

Capital Gain Tax
Capital Gain Tax (CGT) will be 10 percent on selling property within 5 years.

WHT On Selling Property 

FILER (current) 0.5% (proposed) 1% 
NON FILER (current) 1% (proposed) 2% 

WHT (With Holding Tax) On Buying Property

FILER (current) 1% (proposed) 2% 
NON FILER (current) 2% (proposed) 4%

WHT is set to DOUBLE which can fully be adjusted in your income tax returns. 

Tax on Property Income
Tax on renting properties increased.  “In case the gross amount of rent exceeds Rs0.2 million but does not exceed Rs0.6 million, tax at the rate of 5.0 percent will be applicable,” the Finance Bill 2016 says.

“Where the gross amount of rent exceeds Rs0.6 million but does not exceed Rs1.0 million, tax of Rs20,000 plus 10 percent of the amount exceeding Rs0.6 million will be applicable.”

For rental income between Rs1.0 million to Rs2.0 million, tax will be charged at the rate of Rs60,000 plus 15 percent of the gross amount exceeding Rs1.0 million, it added.

For rental income exceeding Rs2.0 million, tax would be charged at the rate of Rs210,000 plus 20 percent of the gross amount exceeding Rs2.0 million.

Taxation of Builders & Land Developers

There is suggestion to increase Tax on Builders & Land Developers.  After discussion with ABAD, final tax is being imposed on builders/ land developers on the basis of per unit area.

5 Answers

0 votes
answered Jun 24, 2016 by Ahmed (1,560 points)
I am sure people will find out ways and the business as usual will remain the same.
0 votes
answered Jul 13, 2016 by hotuser (2,100 points)
Federal Board of Revenue (FBR) will convene a meeting with stakeholders to discuss recent amendment to Income Tax Ordinance, 2001 regarding valuation of immovable properties.
The meeting will be convened on the directives of Finance Minister Senator Mohammad Ishaq Dar.
These directives issued at a meeting chaired by the finance minister on Wednesday and attended by FBR senior officials. Special Assistant to Prime Minister on Revenue, Haroon Akhtar and Chairman, FBR were present on the occasion.
The meeting considered recent amendments through Finance Act, 2016 on valuation of immovable properties and the reported opinions of various stakeholders.
The Minister directed Chairman FBR to convene a meeting with all the stakeholders to attain their views in the matter at the earliest.
Finance Minister also on the occasion felicitated the FBR team for working industriously to achieve the revenue target for the fiscal year 2015-16. He praised their efforts and hoped that the next year’s target of Rs.3621 billion, though a challenging one, would also be achieved if the same spirit of hard work and sincerity of purpose is maintained. He advised the FBR officials to work out the modalities and action plan for successfully achieving the target.
0 votes
answered Jul 18, 2016 by MB (370 points)

جائیداد کی قدر کے ازسرنو تعین اور مارکیٹ ویلیو کے مطابق ٹیکسوں کی وصولی کے لیے انکم ٹیکس آرڈیننس میں ترمیم کے بعد کراچی سمیت ملک کے تمام بڑے شہروں میں ریئل اسٹیٹ کے سودے معطل ہوگئے ہیں جس کی وجہ سے ریئل اسٹیٹ سیکٹر میں مقامی شہریوں کے ساتھ بیرون ملک مقیم پاکستانیوں کی جانب سے کی جانے والی اربوں روپے کی سرمایہ کاری بھی پھنس کر رہ گئی ہے۔

0 votes
answered Jul 30, 2016 by ali (880 points)
Finance Division

Press Release

July 30, 2016

On the issue of Valuation of Property and related tax matters, the Federal Minister for Finance held successful talks with the property evaluators from all over the country at the Federal Board of Revenue on late Saturday evening. The main points of this discussion as agreed are:

Valuation has been agreed for major cities

Valuation tables will be notified by FBR instead of valuation by SBP approved valuers

Till such time and for those areas for which no valuation tables are notified, DC rate will apply

Holding period for CGT(capital gain tax) has been reduced from 5 to 3 years

There will be no CGT on property held for more than 3 years

Properties acquired on or after 1st July 2016:

If holding period is up to 1 year - CGT 10%

If holding period is between 1 and 2 years - CGT 7.5%

 If holding period is between 2 and 3 years - CGT 5%

If holding period is more than 3 years - CGT 0% / exempt

Properties acquired before 1st July 2016:

If holding period is less than 3 years - CGT 5%

If holding period is more than 3 years - CGT 0% / exempt

Valuation will apply on (i) CGT (ii) withholding taxes (iii) for the purposes of sec 111

Basic threshold of Rs 3 million for application of withholding tax on purchase of immovable property enhanced to Rs 4 milllion

·        Appropriate legislation will be done to give effect to the proposed changes as agreed with all stakeholders
0 votes
answered Jul 30, 2016 by ali (880 points)

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