Zero tax proposal on Prime Minister Shehbaz Sharif’s instructions to revive the ailing residential sectors in Pakistan is prepared.
Sources state that a special task force has presented the prime minister with its recommendations. A high level meeting is planned for February 3rd to review and approve these suggestions.
The task force has proposed fundamental reforms with a focus on revitalizing housing and construction businesses.
There are also some major guidelines regarding the possibility of adding more floors to the residential building.
Another important suggestion concerns the full tax exemption from homebuyers for the first time.
This project is intended to democratize homeownership, in particular for young families and middle-income users.
Still, in order to encourage even more investment, a few further steps are being considered.
Such as, by decreasing taxes in a property transaction and by eliminating the federal excise tax in a real estate transaction.
The government is also exploring tax subsidies for low-income housing projects.
These steps would help lower property transaction costs and attract more investors to the sector.
Also, the government is looking into mechanisms to encourage housing loans.
A proposed initiative would introduce affordable home financing options to help prospective buyers and builders.
If put into practice, it would be possible to ease financial strains and make homeownership a possibility for numerous citizens.
Real estate professionals think that these reforms could have a big positive impact on the economy.
The construction industry (he construction sector, which supports nearly 40 related industries) may face greater demand and job growth.
Higher construction activity would additionally benefit businesses in the real estate sector, thereby boosting overall economic growth.
At the same time, the government has been emphasizing property purchase procedures for overseas Pakistanis.
One of the main proposals is to cut the advance income tax from 4% to 0.5%.
Other recommendations include cutting federal excise duty and eliminating the late filer category, which has discouraged many potential investors.
A high-level committee, constituted on the Prime Minister’ birthday, has issued its recommendations.
A comprehensive package is expected to be announced soon after ring the prime minister’s approval and consulting with the IMF.
Officials of the Federal Board of Revenue (FBR) recognize that mounting property based taxes have taken a toll on the real estate activity.
Real estate transactions this fiscal year have dropped by about 50%, resulting in great revenue loss. These figures highlight the urgent need for reforms to revive the sector and restore investor confidence.
