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Property Tax

Property Tax in Pakistan

Pakistan property tax 2017-2018

Property Tax is levied and collection under Paksitan Urban Immovable Property Tax Act.

This is the bad news for the people who want to build their homes. The government has increased the Federal Excise Duty (FED) on cement from Rs 1 Rupee per kg to Rs 1.25 rupee. Similarly, taxes on steel have been increased from 9% to 10.5%. Many construction experts have criticized this move, as it will increase the home construction cost.

INSURANCE OF SMALL HOME LOANS

The government is launching Risk-Sharing Guarantee Scheme for the low income people. The government will provide 40% credit guarantee cover to banks and development finance institutions (DFIs) for home financing of up to 10 LAC. The government has allocated Rs6 billion for this purpose.

GOOD NEWS FOR OVERSEAS PAKISTANIS

The Capital Development Authority will announce a separate sector for the overseas Pakistanis to make secured investment in real estate.

GWADAR, CPEC SPECIAL DEVELOPMENT FUNDS

The government has allocated Rs180 billion for development of CPEC and many other developments. The projects include New Gwadar International Airport, 200 bed hospital, 200 MW power plant, desalination plant and Gwadar master plant.

Taxes to be paid by the buyer
Buyer – Filer (Urban property)

Stamp Duty = 5% as per DC Rate

Withholding Tax = 2% as per FBR Rate

Buyer – Filer (Rural property)

Stamp Duty = 3% as per DC Rate

Withholding Tax = 2% as per FBR Rate

Buyer – Non Filer (Urban property)

Stamp Duty = 5% as per DC Rate

Withholding Tax = 4% as per FBR Rate

Buyer – Non Filer (Rural property)

Stamp Duty = 3% as per DC Rate

Withholding Tax = 4% as per FBR Rate

Gifted property (not to relatives)

For gifted properties which are not gifted within families, stamp duty will be 5% for urban and 3% for rural areas.

Gifted property (spouse, mother, father, son, daughter, grandmother or grandfather etc.)

Stamp duty for urban property gifted within family members will be 3%.

Taxes to be paid by the seller
Seller – Filer

Withholding Tax – WHT = 1% as per FBR Rate

Capital Gain Tax – CGT (as per FBR Rate)

10% CGT on sale of property within 1 year of purchase

7.5% CGT on sale of property within 2 year of purchase

5% CGT on sale of property within 3 year of purchase

0% CGT on sale of property after 3 years of holding period

Seller – Non Filer

Withholding Tax – WHT = 2% as per FBR Rate

Capital Gain Tax – CGT (as per FBR Rate)

10% CGT on sale of property within 1 year of purchase

7.5% CGT on sale of property within 2 year of purchase

5% CGT on sale of property within 3 year of purchase

0% CGT on sale of property after 3 years of holding period

NOTE:

Additional 3% tax was introduced in property tax amnesty scheme, November 2016. According to this scheme people will have to pay 3% tax on the difference of FBR Rate and DC Rate if they cannot show the source of income.

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