TAXES TO BE PAID BY PROPERTY BUYER AND SELLER 2019-20:
All property taxes are as per finance bill 2019-20.
Taxes to be Paid by the Real Estate Property Buyer;
Stamp Duty = 5% as per DC Rate
Withholding Tax = 1% as per FBR Rate
Taxes to be paid by the Real Estate Property Seller;
Capital Gain Tax for Empty Plots (CGT);
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 10 years of purchase.
C- No taxes on profits if plots are sold after 10 years of purchase.
Capital Gain Tax for Constructed Property (CGT);
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 5 years of purchase.
C- No taxes on profits if constructed property is sold after 5 years of purchase.
Formula to Calculate Capital Gain Tax (CGT);
Capital Gain or Profit will be treated as income and will be subject to normal income tax.
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.
FBR Property Valuation Rates;
FBR Property Valuation Rates will rise up to 85% market value.
Case of Non-filers;
Non-filers have been allowed to buy property worth 5 Million PKR or more but;
A- Non-filer has to file returns within 45 days of the purchase of property.
B- Otherwise, within half an hour after the lapse of 45-day period, an automatic assessment will take place asking the purchaser to disclose the source of income.
C- In addition to that non-filer has to pay 5% amount of property price as penalty as per FBR Rate.
Last updated on 14 June 2019.