Ishaq dar is going to meet property dealers on monday to review newly imposed taxes on real estate.What ll be the projected outcome of this meeting? Will govt lift the new-taxes entirely or if to some extent then what %?
By looking at previous bargaining patterns of govt.... Your intitutive & analytic prediticions please :)
Posted in all LRE WhatsApp Groups by me earlier today
Many friends are keep insisting me to give new taxes rates comparison from past year and my take on impact of taxes after market opened this Monday . I am still waiting for more details and also because things are going to be changed to positive side soon anyway. Let's wait for at least one week for an accurate assessment of market reaction and many DC rates new tax rate on empty plots notifications etc. Even DHA Lahore is doing transfer today at old DC rate as new notification perhaps not officially reached to them yet. So Plzzzzz wait and relax and enjoy . Good news soon may change whole game plan.
*Govt already panicked a lot due to market reaction like a complete halt in any property transactions. Have called meeting of all stake holders mainly cancelation of billions worth deals etc and angered all serving and retired military officers as DHAs in all cities are getting hurt most and get nothing from additional collected taxes. Imagine each officer seeing a deal canceled or having 20 lacs injection in a day on each plot with Govt ill planned property taxes . Dar sahib told by friends hath howla rakhu sir gee. Govt also very afraid and have realized now tax collection could be less than half of last year if nothing done to reverse changes very fast.
Wait for good news of tax rates reduction or possibly a complete reversal of all changes very soon. As soon as next month if not next week.
Among many other proposals a *Strong workable proposal in discussion to get a flat 2 % capital gains tax (Federal CGT) on current fair market rates at transfer time from sellers regardless when and at what price a property was bought. All money after paying 2% will be white now * (Fair market price to be fixed by State Bank evaluators in advance like DC rates). Simple and acceptable to all stake holders.
This is or may be was a bigger blunder of Govt than freezing foreign currency accounts in past and hurting foreign remittance in past. They have shaken conference of expatiates people in Pakistan property market very badly already.
I am also attaching some important ongoing tax issues reads in PDF format for only boring people like me
Enjoy
Choudry Mujahid Yasin (CMY)
+16308024186
Nice one @khan sb
Govt imposed 10% and " Strong working proposal" is to implement 2% flat. So, can we inference that new CGT will be around 4-5%.
No ??? :)
CGT rate was 10% even before this budget... I don't think they will decrease the percentage.
Regards
Property prices will crash not because of the new Tax but because of the new evaluation mechanism! Nobody will be able to buy property on offical market value with white money. Real estate market is in for one of the worst slump in Pakistan history.
Even before the new mechanism I have seen property being sold 30-50% below market value where the seller wanted all white money on market rate!
Yousaf sb…Sir keep dreaming…
Khan bhai it was 5 pc i think and that too if you sell the with the two years of date of purchase…
@SAADI_AQUARI Boss mark my words property prices all over Pakistan will see the biggest slump in Pakistans history. Especially in areas like DHA where the collector rate is very low. There are just not any buyers at market rates with white money. Market already at stand still and ZERO transactions being done!
Yes @Yousaf sb, evaluation mechnanism is really perturbable for the mafia who is using real estate as a parking-lot for their black money, but this poor invalid is not seeing any “Crash” in market, but a correction.
Dears, taxes was as follow before this budget:
Cvt: 2%
Stamp duty: 3%
Advance tax: 2%
Capital gain Tax: 1%
and all on DC value
Yousaf sir you may be right in that regard that market may enter a slump but i am not foreseeing any price decrease sir…Yes property would be hard to sell but prices would sustain itself. You can see that there was already a slump in isb market but prices were high and if that is the case as u said, most affected areas would be sectors of E,F series of isb because they are most undervalued and insanely priced.
Taxes without proper long term considerations are a nuisance, and for high volume transactions may cause property prices to bloat like a ballon in short term before they burst taking the whole market down with them. Take a sample case of any property that changes hand a couple of times a year, and then calculate how many taxes are padded in.
Secondly, FBR now have full backing of the government to seek out investors, and send them notices. That will certainly add to stress, even for genuine buyers who will now be running around to collect papers so that they can satisfy objections. Anyone who has dealt with the government department for simplest of matters knows how they work.
Ofcourse big mafias who have connections and can work they system are telling everyone "not to worry" while they get their own investments out to safe heavens and leave the small guys at the mercy of new laws.
Market is very slow and transfers are very less in big brands.No buyers and nobody want to sale.Everybody is waiting and i agree with Yousaf that market may slump.
Regards
Looking at past track record of Dar sb on dealing with non-filers, I don't think he's going to bend to property dealers.
Some other optimist bro who thought that offending army officers would put govt in trouble should think again, coze the Chief himself has hanged the DHA mafia lords high including Kiyani brothers. So, the optimism of my bro is unfounded.
Another amnesty is in the offing. Govt will try to negotiate a one-time amnesty for the black money invested in real estate. It will kill three birds in a stone: will bring more people in tax net, will bring nearly 3000 bn Rs parked in property into circulation, will raise more taxes from property exchanges.
Oye Geo Dar'a !
New rules spark slump in real estate market.
Regards
Whether negotiations are successful or not, I do not see price increasr, unless there is a huge influx of black money parked in overseas property.
In the normal case scenario, there will be major price correction to its natural value, as the market will loose the black money that plays up speculative market.