Budget 2022-23: Government proposes new tax for real estate sector

According to news released on June 11, the federal government has proposed to impose a new tax worth PKR 440 billion on the real estate sector in the proposed budget expenditure for the 2022-23 fiscal year.

The FBR proposal proposed a 5% tax on non-productive real estate, unused commercial/residential/industrial real estate and income from farmers. In Pakistan, he said, anyone who owns more than one property priced above PKR 25 million will receive rent equal to 5% of the property’s fair market value and must pay 1% of the property’s fair market value. .

In addition, changes to the real estate transaction tax were proposed. It is currently proposed to impose a 15% tax rate on capital gains for all asset classes if the holding period of the property is less than one year. The government wants to increase the pre-tax rate from 1% to 2% for applicants who buy and sell real estate, but proposes 5% for non-applicants.

The budget also proposes that non-resident Pakistanis (NRPs) pay capital value tax of 1.00 on foreign real estate and foreign liquid assets. The government is estimated to collect 18 billion PKR on these measures of NRP.

Federal Board of Revenue (FBR) Chairman Asim Ahmad said the commission proposed a new tax worth PKR 440 billion. 34 billion rupee customs duty, 90 billion rupee excise duty and federal excise duty (FED), 316 billion rupee income tax.

The chairman also announced that the FBR has proposed to offer the public tax relief of PKR 85 billion in the next fiscal year, with an effect of PKR 355 billion. According to the Finance Law, the government is proposing PKR 316 billion for new income tax measures for the next financial year 2022-23.

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