LCCI welcomes property tax relief, seeks wider FBR valuation cuts

Lahore: The Lahore Chamber of Commerce and Industry (LCCI) has welcomed the federal government’s tax relief measures for the real estate sector, while urging authorities to extend reductions in the Federal Board of Revenue (FBR) property valuation to more housing societies and areas to further stimulate investment.

Speaking at a seminar organised by the LCCI on Saturday, Federal Parliamentary Secretary for Planning and Development Hafiz Mian Muhammad Nauman said the government’s reforms are aimed at reviving investment and restoring confidence in the real estate sector, which is directly and indirectly linked to around 70 industries and serves as a major source of employment.

LCCI President Faheemur Rehman Saigol, who chaired the event, praised the government’s decision to reduce withholding tax on property purchases from 2.5% to 1.25%, lower the tax on property sales from 5.5% to 2.75%, and abolish Section 7E of the Income Tax Ordinance. He said these measures would help restore investor confidence and encourage greater market activity.

However, Saigol urged the government to expand the reduction in FBR property valuation rates to other housing societies and localities, saying the business community expects equal treatment across the sector. He described the demand as justified and said broader implementation would further strengthen the impact of the reforms.

Addressing the seminar, Nauman said he had raised the need for comprehensive real estate reforms with Prime Minister Shehbaz Sharif nearly a year ago and had advocated for a construction package to support the sector. He said the government held extensive consultations with industry stakeholders, including the Association of Builders and Developers (ABAD), before finalising the reforms.

Highlighting the significance of abolishing Section 7E, Nauman said taxing non-income-generating assets had created serious concerns among property owners and investors. He said removing the provision was a major relief intended to restore market confidence and encourage investment.

The parliamentary secretary also stressed the need for Pakistan to shift from unchecked horizontal urban expansion to vertical development. He noted that the rapid spread of housing schemes had significantly reduced green areas around major cities, particularly Lahore, where urban development now extends into adjoining districts such as Sheikhupura and Kasur.

Instead of expanding cities outward, Nauman said Pakistan should promote high-rise development to make better use of existing urban infrastructure. He added that an estimated 150,000 to 200,000 residential plots remain vacant within Lahore, indicating substantial capacity for planned vertical growth.

On affordable housing, Nauman said home ownership remains beyond the reach of many Pakistanis due to the high cost of financing. He emphasised that long-term mortgage financing through the banking sector is essential to make affordable housing viable and suggested that Pakistan adopt financing models similar to those used in developed countries, where home loans are typically offered over 15 to 20 years.