New Duty Rates on Property Transfers in Pakistan after Budget 2024-25
The recent budget for the fiscal year 2024-25 introduced significant changes to the duty rates on property transfers in Pakistan, aimed at increasing revenue and regulating the real estate market. Here’s a breakdown of the new rates and measures:
Duty Rates on Property Transfers
The new duty rates have been categorized based on the taxpayer status of the buyer:
- Active Taxpayer List (ATL):
- Buyers on the ATL will be charged a duty rate of 3% of the property’s total amount.
- Filed Income Tax Return but Not on ATL:
- Buyers who have filed their income tax returns by the due date but are not listed on the ATL will face a 5% duty rate.
- Non-ATL Buyers:
- Those not appearing on the ATL at the time of property acquisition will be subjected to a 7% duty rate.
These measures are expected to streamline property transactions and encourage tax compliance among property buyers.
Additional Measures
To further regulate the real estate market and curb fraudulent practices, the government has introduced additional measures:
- Digitization of E-Registry: The property transfer services will now be digitized, ensuring more transparency.
- QR Code Payment Mechanisms: This new payment method at cattle markets aims to prevent tax evasion.
- Withholding Tax Adjustments: The withholding tax rate for the sale and purchase of immovable property will see a gradual increase based on the investment amount.
These steps are designed to stabilize the real estate market by reducing speculation and making transactions more transparent (Pakistan Observer).
Provincial Changes
The Punjab Assembly also approved new property tax rates as part of the budget:
- Residential Properties: Properties up to Rs50 lakh are now tax-free.
- Commercial Properties:
- Properties valued between Rs5-10 million are taxed at 0.07%.
- Properties worth Rs10-25 million are taxed at 0.08%.
- Properties over Rs25 million are taxed at 0.09%.
These changes are expected to generate significant revenue for the Punjab government, addressing budgetary needs and enhancing public infrastructure.
In conclusion, the new duty rates and additional measures reflect the government’s effort to increase tax compliance, regulate the real estate market, and ensure transparency in property transactions.
