Govt to revise tax regime for Real Estate Sector

June 2, 2021

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The government may revise the property tax regime in the next budget, which it believes will generate additional income of Rs 8 billion per year.

As per the sources, any income of more than Rs 20 million earned from real estate, Tax could be levied under the normal tax regime, resulting in an additional Rs 4 billion in tax revenue. The current Capital Gains Tax (CGT) is only 10% for the highest income slab at Rs 1.5 crore. For comparison: if a person’s annual salary is between 12 and 30 million, he must pay a tax at the rate of 27.5%.

Sources said the government may also revise taxes on rental income of the real estate, which will bring in an additional 4 billion rupees. The total tax levied on both measures will bring roughly 8 billion rupees, while the government may receive more tax revenue if the prices of real estate in the suburbs of Islamabad are brought to market value.