The Federal Board of Revenue (FBR) has assured the International Monetary Fund (IMF) to bring the real estate sector into the tax net, FBR sources informed ProPakistani.
Sources said there will be a big increase in taxes for non-filers buying and selling plot files. Additionally, there’s a proposal to shift towards using banking channels for transactions within the real estate sector to ensure proper documentation.
Sources added that all records of housing societies, including plot cutting and land purchases, will be registered. Registration of housing societies will be made compulsory while data on property agents and plot sales will be regularly updated with the FBR.
A coordination report on taxing the real estate sector in all provinces will be presented to the IMF. Sources said steps will be taken in the upcoming federal budget (2024-25) to eliminate undocumented real estate transactions and to charge taxes where appropriate.
Sources said tax rates will be further increased for non-filers involved in buying and selling plots. Currently, a standard 7 percent withholding tax and 4 percent gain tax are charged on non-filers involved in plot sales.
Sources added that these measures were pivotal to improving the tax net and documenting the economy to a greater extent. Notably, a massive chunk of tax evasion stems from the lack of an adequate regulatory mechanism for monitoring the sale and purchase of housing society files.
