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Property Taxes in Pakistan

Property Taxes in Pakistan:

The government has introduced new property taxes in Pakistan on sale and purchase of real estate. This blog details out all taxes;

Non-filers

Non-filers have been allowed to buy property worth 5 Million PKR or more but they have to become filer.

Property Taxes to be paid by BUYER:

Stamp Duty = 5% as per DC Rate

Withholding Tax = 1% as per FBR Rate

Property Taxes to be paid by SELLER:
Capital Gain Tax (CGT) for PLOTS

A- 100% profit amount/gain to be taxed if plot is sold within 1 year of purchase.

B- 75% profit amount or gain will be taxed if plot is sold within 8 years of purchase.

C- No taxes on profits if plots are sold after 8 years of purchase.

Capital Gain Tax (CGT) for CONSTRUCTED PROPERTY

A- 100% profit amount to be taxed if constructed property is sold within 1 year of purchase.

B- 75% profit amount will be taxed if constructed property is sold within 4 years of purchase.

C- No taxes on profits if constructed property is sold after 4 years of purchase.

Capital Gain Tax (CGT) % Calculations:

5% Tax on profit amount less than 5 Million PKR.

10% Tax on profit more than 5 Million PKR but less than 10 Million PKR.

15% Tax on profit more than 10 Million PKR but less than 15 Million PKR.

20% Tax on profit more than 15 Million PKR.

Withholding Tax (WHT);

A- Withholding Tax is decreased from 2% to 1% for filers. WHT will be collected as per FBR Property Valuation Rate.

B- Earlier there was no WHT on purchase of property if price was less than 4 Million PKR. But now WHT will be collected on all transactions.

C- Earlier there was no WHT if property was sold after three years of purchase. Now WHT will be collected up to 5 years. But if selling property after 5 years of purchase then no WHT.

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19 Comments

  1. Ahmad

    on   said 

    Pakistan is in recession whether we admit it or not. We don’t know how long it will remain like that. On the top of that world economy is also heading to recession and I don’t know how it will impact Pakistan. Last time we survived but this time situation is ambiguous.
    Second thing no country in world will grow just based on things related to Land i.e. agriculture, oil, mineral, real estate etc. We were and we will always be on survival mode if we don’t change our attitude towards business model. Industrialization is only solution but looking at current scenario I can say we already miss train of industrialization. “Hamesha daer kur deta hoon main hur kaam kernay main…” Muneer Niazi

    Reply
  2. Jamshed

    on   said 

    Reasonable price for DHA defence KHI 500 yards plot should be no more than 2 crore and of house from 4 to 4.5 crores.

    Reply
  3. The sellers have tremendous holding power they are still asking 5 to 6 chores for a 500 sq plot in DHA khi which is not worth that much
    God only knows when the time will come to buy

    Reply
  4. rizwan

    on   said 

    THE MARKET IN KHI IS TOTALLY DEAD AT THE MOMENT THERE ARE NO OR VERY LOW TRANSACTIONS ON CURRENT PRICES…PANIC WILL START TO GRIP IN A MONTH OR 2….BUYER IS NOT READY TO BUY ON THESE PRICES…SELLERS IF HOLD WILL LOSE IN REAL TERMS AS RS DEVALUE …THEY NEED TO SELL AND THEY CANNOT FIND BUYERS..

    Reply
  5. Jamshed

    on   said 

    There is no sale , purchase at present on asking price rates. Sellers are reluctant to sell their properties 40 to 50 percent below the asking prices. Last week , one 500 yard villa in DHA phase 6 was sold at 6 crore in Khyaban Bahria. The real estate agent was telling me that there is no buyer in the market. Distress selling is going on at 40 to 50 percent below the asking price. This would take 6 months to 1 year for the actual market value of the real estate and that would be probably 50 percent below the current prices Any how , real estate has lost its shine.

    Reply
    • Jamshed
      Thanks for regularly updating the forum with the current market trends.
      40-50% price fall in next one year + currency devaluation + 30-40% decline from 2016-19.
      So Pakistan Real Estate Market is falling in the style of Dubai Real Estate where property prices are 75% down from peak of 2018.

      Reply
  6. abc

    on   said 

    Those who purchased property before 1st july 2019 will also come under 8 years tenure of capital gain tax or old rule of three years will apply on them?

    Reply

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