Islamabad: The Pakistani government recently changed the tax code for real estate sales in an effort to increase income and assure greater compliance. Reliable news sources report that this most recent development has led to an all-time high cumulative tax rate for non-filer purchasers and sellers of 18.5%.
The new tax rates only apply to the purchasing and selling residential real estate. It includes houses, plots, and apartments and went into effect on July 1. The tax rate on property sales acquisitions for non-filers has increased from 7% to 10.5%, a significant rise. On the other hand, non-filers selling real estate will now be subject to a 6% tax instead of 4%.
The property’s assessed value includes a 1% stamp duty and a 1% municipal tax. Imran Migrani, the president of the Property sales Dealers Association, has stated that tax requirements for people who deal in real estate will also increase significantly. The advance tax rate for filers has increased from 2.2% to 3.3%, which now applies to purchasers and sellers.
Following this amendment, the federal and provincial governments are anticipated to receive an additional 8% tax on real estate transactions. This extensive tax structure overhaul will establish a fair and transparent tax system. It will also encourage more people to engage in the formal sector.