Even if the money is remitted through banks and it's white but the rules are black where is the declaration or docementation of source of money at time of purchase? Nobody ask you that time and more over this CGT will be calculated every year and it will be a surprise like electricity bill.
Don't excpect anything good from this govt. Whole game is take share from your hard earned money.
DC value of dha 1 is revised at 63 lacs and for dha 2 it is yet to be fixed but is expected to be somewhere close to 5 milion±…For dha 2 it was 25 lacs earlier so nothing to worry about…Hungama zada hai or masla kamm hai…
Fake price increase will be minimized
State Bank names firms to determine market value of properties
AOA,
Eid Mubarak to all all forum members.
Regards
As per the news papers, Government has advised mechanism in details. Some expert please advise in details to us (laymen).
Also please advise how it will affect prices(low or high) from buying perspective
Prices will be stable for 2,3 months
It would b hard to do sale and purchase for investor, most of the genuin buyer will buy. Prices will definitely go down when number of buyer would fewer. Property dealer r so much worried that they even have given request advertisement in the news paper for reducing taxes but i dont think Gov will listen to them bcz they dont have any option.
Attention: All the investors and property owners;
Do not panic under the current circumstances, HOLD your properties and do not offer your plot for sale in the market until extremely necessary.
Even in that case, DO NOT give it away below the current market price.
Things are not clear yet and the implementaion of the new law is almost impossible. So DO NOT panic, relax and HOLD your properties.
Don't sale,purchase until the situation has settled down.
I think no more charming in real estate.
Jis mulk ki leadership UK ior UAE and investment karti ho uss sa achi umeed rakhna hamakat ha.
At the moment top leadership in London to celebrate Eid.Jis mulk ki leadership chotian manana Pakistan ati ho waqhi uss awam par tax faraz banta ha.
Iss leadership ma na to koi iss mulk ma invest karta ha ior na hi invest kara ga.
Yah zaroor ha IMF sa loan lana ha ior installment awam na barni ha.
Regards
Dear how long one can hold? and how many can hold what about last 10 year non filer and 5 year filer sale purchase record,i guess majority have written low value of plots plus every year tax on plot gain its a trap for the medium and small investor. How many people will protest against it? no one knows how Gov will act to ensure the new laws
Maximum you will have to hold for 4,5 months, real estate would be 100% stable by then. And there is a HUGE misconception about the nex taxes in public.
In my opinion, STAMP DUTY, CVT will be charged according to the DC rate and NOT the market value. SBP will NOT evaluate each and every property, only those which FBR refers them for evaluation just to know if the buyer is showing less worth to hide his black money. And even in that case there are a lot of chor rastay/rishwat khori. So DONT panic and give away your property, HOLD for atleast 2,3 months.
People who already paying taxes will further pay more tax if the market value of thier property would be higher. Black money holder and non filers tou wese bhi tax net mai atay hi ni .
pakistan ki real estate mai charm hai tabhi tou capital UK, UAE, or turkey se pakistan shift horaha ha.
And there is no alternative to invest money for overseas pakistanis and job sector people in pakistan
I copied it from zameen.com blog.
If you thought property purchased or sold only after July 1, 2016 would be evaluated per the new mechanism and be taxed accordingly, you have been wrong!
Federal Board of Revenue (FBR) has released further details on New Property Evaluation Mechanism, which is now termed as Procedural Law. The valuation mechanism for immovable property will be applicable on property deals done between 2006 and 2016. In other words, property owners and investors who haven’t paid their property taxes on transactions done between these 10 years will now have to pay up.
Once again, the terms are different for tax filers and non-filers. The tax filers will pay taxes on property they purchased and sold in the last 5 years while the duration for non-filers is 10 years. Evaluation of immovable property will be carried out by the evaluators appointed by State Bank of Pakistan (SBP).
According to news details, FBR plans to collect 35% tax and a similar amount in fine from people who allegedly invested their black money in real estate during these years. If needed, the chances of facing a two-year imprisonment also stand valid.
This new rule allows FBR’s Commissioner for Inland Revenue to refer immovable property deals to the panel of evaluators appointed by the SBP. From the tone of this news, it doesn’t appear that studying record of the past deals is done just to know the correct current market value of the property. If the intention is to collect tax on the past trades, many people can go bankrupt paying taxes on property they have purchased and sold in all these years.
The press release reads that this mechanism to check property trade records of the past year will help the government collect 35% tax on the black money that has been cycled in the real estate since 2006. And not to mention, there would a 35% fine on tax evaders. Fortunately or unfortunately, tax as well as fine percentage is the same for filers and non-filers.
Furthermore, SBP has committed to ensure that property evaluators’ panel, comprising experienced personals, will complete the evaluation process in a transparent manner. This process, per the press release, will be completed within a month.
You see, it was a long press release claiming that known tax experts, chartered accountants and patriotic business community of Pakistan had widely appreciated the decision. These “experts” believe that the new mechanism will not only help collect tax of billions of rupees, it will also help FBR effectively enforce its writ, paving way for establishing a fair and equitable taxation system throughout the country.
Meanwhile, as you read this article, another major development is taking place. The Excise and Taxation Department has started to prepare lists of plots that are lying vacant for the last two years. This is being done to collect taxes from the respective plot owners.
According to Excise and Taxation Director Rizwan Sherwani, about 650,000 plots lie vacant at the moment but he did not clarify if the plots were located just in Lahore or throughout Punjab or the country for that matter. The owners whose plots are vacant will be required to pay 10% of the property tax applicable on the respective locality.
Dear Asad sab,
kon sa ior kasa charm baqi rha jya ga agar yha tax lag gya?
I know many overseas investors who are going to move to UAE and other business sectors because of huge tax news.
I agree with Fahad that hold and wait.ho sakta ha inn be-sharamon ko sharam aaye jaay.
Regards
Major impact of these taxes will be on people who are doing sale/ purchase frequently, many times in a year.
For genuine buyers, it will be a one time impact as they do sale / purchase once in many years.
10% CGT is also suggested only for sale within 5 years. No CGT after 5 years. So genuine buyers not effected.
New property tax in Punjab to hurt ordinary citizens.
LAHORE: The new property tax imposed on ‘utilised’ plots which aims to create more provincial revenues is likely to burden ordinary citizens and pensioners rather squeeze the speculative trade of real estate.
The Punjab government has fixed two years of delivery of possession to the owner for the levy of tax.
The government amended the Punjab Immoveable Property Tax Act 1958 through the Punjab Finance Bill 2016, paving the way for the provincial Excise and Taxation Department to collect property tax with different ratios for different categories on vacant plots in order to increase tax base and check speculative trade of real estate.
Other objectives of the tax are to improve of supply of housing by discouraging retention of vacant plots for long periods of time and strengthen local government tax base.
Officials initially estimate the revenue collection of around Rs250 million in the current fiscal year 2016-17.
The tax,which has actually been imposed to bring ‘unbridled’ real estate sector into tax net, is going to pass major relief to the same sector as the Punjab cabinet had reportedly given approval that the tax would be levied after two years of delivery of possession to the owner against the proposal of the E&T Department which did not want the time frame.
Informed sources privy to the development told Dawn the two-year relaxation would ultimately provide relief to property investors and totally burden ordinary citizens including pensioners who retain property for personal reasons.
They said the real estate sector would easily skip tax for seven categories throughout the province because of time period relaxation ‘intentionally’ given to them.
Sources, however, claimed the tax ratios for vacant properties would be affordable for citizens.
Moreover, the provision relating to exemption of building and lands used exclusively for educational purposes is proposed to be clarified by adding an explanation.
Punjab E&T Director General Akram Ashraf Gondal said the department, despite having provision in the law for collecting property tax from lands, did not invoke it in the past but the amendment had now empowered the department to tax the vacant land/plots as a policy.
He said the department was planning to start a detailed survey of such empty residential, commercial and industrial properties with the help of city development authorities, cooperative housing societies and local administrations to compile a data and notify tax as per rate of land, hoping to complete the process by the end of September 2016.
Gondal further said the new amendment would help the provincial government to collect more revenues, document provincial economy and overcome speculative business in sale and purchase of properties.
He said the tax with multiple and reasonable rates would be applicable on transfer and acquisition of property.
The amendments: As per amendment in Act V of 1958, (a) In section 2, after clause (a) the following new clause (aa) she be inserted: “(aa) ‘buildings and lands’ include vacant plots or a parcel or portion thereof having fixed boundaries intended for specific purpose including residential, commercial and industrial use”.
(b) In section 4: (i) in clause (d), the following explanation shall be inserted and shall be deemed always to have been so inserted: Explanation: The expression ‘buildings and lands or portions thereof’ shall mean the buildings and lands or portions thereof owned by the government or by a body owned or controlled by the government”
(ii) For clause (i), the following shall be substituted: “(i) One residential house or vacant plot, measuring an area not exceeding five marla , used or to be used for residential purpose except a residential house or vacant plot with annual value of more than five thousand rupees situated in a part of a rating area and categorised as category-A area” and
(iii) after clause (i), the following clause (j) shall be inserted:
“(j) a vacant plot whose possession is handed over to the owner for the first time and remains vacant or without construction for a period not more than two years from date of delivery of possession.
Explanation-If possession is handed over to any owner, the period of two years shall be reckoned from the date even if the plot is transferred to a subsequent owner.”
(c) In section 5-A, for the full stop, a semi colon shall be substituted and thereafter, the following proviso shall be inserted:
“Provided that the annual value of a vacant plot shall be in accordance with the valuation table notified for respective locality of the rating area” and
(d) after section 16, the following section 16-A shall be inserted: “The authority responsible for registering an instrument of sale, gift or exchange of immoveable property shall not register the instrument unless it is satisfied that the outstanding tax has been paid.”
Regards
It seems that this govt. Plans to make next budget from only property tax collection and enjoy their life on loans from IMF. But ultimately this will cease the property business, Nadeem bhai is right there is no charm left in property for investors, yes it is good for genuine buyers but still they'll have to pay taxes even if they don't sale.
It looks that prices are moving down after tax announcements, and as usual awaam will stay quiet.
Imran where you are noting prices coming down …?
@Muhammad
if you have any plot in any society just put it for sale on one month old price or take it to dealers and ask to sale it on best know market rate you'll notice yourself.