As the budget speech unfolds, it becomes increasingly clear that the leniency previously extended to non-filers is being gradually revoked. Until recently, the capital gains tax rate for securities and real estate transactions, held for less than a year, stood at 15%. However, it appears that stricter measures are being implemented. Under the new proposals, both filers and non-filers will face a uniform tax rate of 15% for buying and selling these assets.
Non-filers, however, will bear the brunt of the tax burden, facing rates as high as 45% on transactions in both real estate and securities. This approach aims to compel non-filers into compliance and broaden the tax base, aligning with the government’s objectives as per IMF demands.
There’s a promising incentive for non-filers to transition into filers, with the tax rate decreasing by two-thirds upon filing. Real estate, often criticized for evading taxes, will now be subject to a Federal Excise Duty of 5%, intended to curb speculation in the sector. However, the implementation of this duty, especially in the informal real estate market, remains uncertain.
Finance Minister Muhammad Aurangzeb announced these changes during his budget speech in the National Assembly, emphasizing their role in formalizing the economy and dispelling rumors within the housing sector. The projected revenue from income tax on properties for the upcoming fiscal year is set at Rs 477.11 billion, highlighting the anticipated contribution of these measures to a more transparent and regulated real estate market.
