In respect to increase the capital gain tax by the Federal Government of Pakistan on the sale of property from 1% to 10% and increase the sale period from 2 years to 5 years, this decision will determine to minimize the volume of transactions and real estate business will be doomed, in fact the real estate business will be finished. This step taken by the present government will be the murder of nationwide real estate business and economic groups linked to this business.
Heavy tax already implemented on the transfer of properties includes:
- By the Federal Government, on the sale and purchase, the seller and the buyer will have to pay the capital gain tax and withholding tax.
- 2% CVT Capital Value Tax by the Provincial Government.
- 3% stamp duty levied by the provincial government.
- 3% TIP tax from the Cantonment or Concerned Authorities.
- Corporation tax.
- On transactions of Constructed Buildings taxes in the covered area.
- Heavy Transfer Fees by the related housing societies/Authorities.
All these transfer costs have caused the real estate business to reach the least limit of destruction, adding on the imposition of heavy taxes is to hold the breath of real estate business.
For God sake, have some mercy on the real estate sector, burdened by heavy taxes on real estate business.
- The decline in sales of properties may cause a reduction in revenue of Government.
- The Local Investment will drive abroad.
- Real Client will not invest in real estate located abroad.
- The construction industry will be destroyed.
Therefore, Appeal to the Government not to apply any further tax.
Rather, withdraw the enforcement of capital gain tax and the decision to determine the property value on sale and purchase of property on market rates. The real estate should be continued on DC rated issued by the Provincial Government which will save this sector by the Bankruptcy.
I would like to remind you that the period of Government of PML(N) in 1997 was really memorable due to good governess, progress, prosperity, excellent performance of all the institutions, provision of basic needs to the nation and peaceful environment, It may called the golden period because the Government of Punjab has reduced the property transfer tax from 17% to 7% to save the real estate business. Due to this decision, property business was increased and the Government earned millions of rupees as tax revenue.
Similarly, the increase in sale and purchase of properties will increase government revenue. And the economy will be strengthened.