Property owners
The federal government has proposed a 1% ‘deemed rental income’ tax on property valued at Rs25 million or above.
People who own a property other than the house they live in will be deemed to have received rental income from that property if it is valued at Rs25 million at ‘fair market value’. They will be taxed 1% of the “fair market value” of the property. However, one home owned by everyone will be exempted from this tax.
“All persons who have more than one immovable property exceeding Rs25 million situated in Pakistan shall be deemed to have received rent equal to 5% of the fair market value of the immovable property and shall pay tax at the rate of 1% of the fair market value of the said property,” the finance minister said.
The government has also proposed a 15% tax on capital gain from immovable property in case of a one-year holding period. With every passing year after the holding period the rate will decrease by 2.5% and will drop to zero after six years, the finance minister announced.
This means that if you buy a property and sell it within one year, you will be paying 15% tax, and if you sell in the second year you will be paying 12.5% tax and so on.
The government has also increased the advance tax rate from 1% to 2% for filers and to5% for non-filers.