The Federal Board of Revenue (FBR) has decided to ease the real estate sector by reducing the duration and the percentage of withholding tax.
The new tax relief is likely to boost the dying real estate business in the country.
Currently, no taxes are applied if the purchased property is held for three or more years. If the buyer sells the property before three years, a property tax is imposed on it.
But, the finance bill 2019-20, passed from the National Assembly on Friday, proposed a 15 percent property tax if a house, flat or a plot is sold within ten years of purchase. If the property is sold after ten years, then it won’t be taxed.
However, the FBR has decided to further lower the duration and the tax rate.
According to the sources, a proposal has been sent out to the government for approval which suggests a five percent tax on property worth Rs. 5 million if sold before four years. Similarly, the FBR wants to charge 10 percent tax on the property worth Rs. 10 million if sold before the said time.
What this means is that if you sell your Rs. 5 million property within 4 years of ownership, you’ll be charged 5% tax (10% on an Rs. 10 million property) instead of the full 15% that will be charged with the new finance bill. That is if FBR’s proposal is approved.
The government is expected to announce the details of the tax and the duration on Sunday (tomorrow).
Via: Geo News