The budgetary measures that have been opposed by the Association of Builders and Developers (ABAD) include raising the real estate Capital Gains Tax (CGT) to 15 percent for filers and 45 percent for non-filers and imposing a five percent federal excise duty (FED) on new plots, commercial, and residential properties in order to reduce speculation.Chairman of the ABAD Asif Sum Sum stated that extra charges are needless because the real estate industry is already burdened with too many taxes.
He said, “New taxes will not only put additional strain on the real estate sector, but they will also discourage Pakistanis living abroad from investing their hard-earned money in Pakistan’s property market.” He issued a warning, saying that these actions would encourage Pakistanis living abroad to make investments abroad, which would have a big effect on the regional real estate market.
He noted that under sections 236C and 236K of the Income Tax Ordinance, there are already advance taxes of 3%, a town tax of 2%, and a withholding tax of 1%, among other levies. “It appears that the government aims to shut down the local construction industry by imposing new taxes,” he said.He underlined that the government appears to have forgotten that these new levies will ultimately impact consumers.
In addition, he asserted that the government had disregarded their pre-budget recommendations, underscoring the mounting dissatisfaction inside ABAD and the pressing necessity of communication between the government and the real estate industry.
