Budget measures regarding new housing societies: FBR, provinces to document ‘plot file’ trading

ISLAMABAD: The Federal Board of Revenue (FBR) and provinces will take measures in the coming budget (2023-24) to document the trading of files of plots at newly-developed private housing societies from July 1, 2023.

Sources told Business Recorder here on Monday that the FBR is considering to further raise taxes on the non-filers on the buying and selling of immovable properties in the upcoming budget (2023-24).

The FBR and provinces will issue increased values of immovable properties from July 1, 2023. The FBR has already started the process of the updation of valuation tables of properties across Pakistan in consultation with the provincial authorities.

Immovable properties: FBR to unveil increased values from July 1

“The FBR rates will be notified keeping in view the fair market value to address the issue of dumping of black money in the real estate sector”, FBR official said.

According to the sources, the taxes are avoided by the private housing schemes during trading of files of plots across the country. The target would be registered property agents who are involved in business transactions between the buyers and sellers of immovable properties. Many new private housing societies are involved in the avoidance of taxes by not showing actual transfers and trading of files continues without payment of taxes

To check such activities at the private housing schemes, the FBR will take measures in coming budget to document buyers and sellers and ensure payment of taxes. The legal changes would ensure two things i.e. one, payment of taxes on buying and selling of files of plots by private housing societies and secondly, it would also ensure documentation of the immovable properties.

Presently, the government had increased the tax rate from 100 percent to 250 percent in case of the purchase of property by persons who are not active taxpayers. In case of purchaser of immovable property who is not appearing on the Active Taxpayers List, rate of tax to be collected under section 236K has been increased by 250 percent of the rate specified in Division XVIII of Part IV of First Schedule. Necessary change has been incorporated in rule 1 of Tenth Schedule to the Income Tax Ordinance.

The FBR has asked the senior members Board of Revenues, Sindh, Balochistan, Punjab and Khyber-Pakhtunkhwa, Gilgit-Baltistan with the request that instructions may be communicated to the Divisional heads/District heads for nomination of representatives of the Board of Revenue for consultation/consideration with the teams constituted by the chief commissioners of Regional Tax Offices.

Copyright Business Recorder, 2023