ISLAMABAD – The federal government is expected to withdraw Federal Excise Duty (FED) on property transactions, a move that would once again bring a boom to real estate sector in Pakistan.
Reports said FED, which is collected on transfer of plots and commercial properties under Finance Act 2024, will be revoked as it could not yield desired results in first six months of the running fiscal year 2024-25.
The Federal Board of Revenue (FBR) has planned to recommend the government to revoke the excise duty on first allotment of commercial and residential properties and open plots.
If the suggestion is approved, it will be implemented in upcoming budget for fiscal year 2025-26.
Furthermore, the government is planning to reduce the transaction tax imposed on property buying and selling in order to boost the under-pressure real estate sector. The meeting of the task force formed for the development of the housing sector has been postponed twice last week due to the Prime Minister Shehbaz Sharif’s busy schedule, and it is expected to be held this week.
The task force has recommended the removal of Section 7E of the Income Tax Ordinance, the Capital Value Tax (CVT) in Islamabad, and a reduction in the transaction tax imposed on property buying and selling.
Additionally, the task force has recommended standardizing and rationalizing the stamp duty rates across various provinces and Islamabad Capital Territory, abolishing CVT in Islamabad, and implementing uniform tax policies through the National Tax Council.
Furthermore, the task force has proposed providing an exemption from wealth reconciliation for investments up to Rs50 million in the real estate and construction sectors.
