Government Suggests Flat 5% CGT on Immovable Property
Islamabad: According to news reports, the government proposes to impose a flat 5% Capital Gains Tax (CGT) on the sale of immovable property valued at least PKR 5 million and bring property taxation under a “regular tax framework” in budget 2021-22.
Currently, the CGT is subject to multiple tax brackets ranging from 2.5% to 10%, depending on the amount of revenue earned.
The decision, according to government officials, is part of an effort to simplify the real estate tax structure and fulfil revenue estimates for fiscal year 2021-2022. (FY22). During the budget session, Finance Minister Shaukat Tarin felt it necessary to revise the business losses for the current fiscal year.
However, realtors and developers are displeased with the proposed tax structure. Real estate sector insiders have identified the development as a move that will impede the growth of the construction industry.
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However, members of the real estate industry have met with the Federal Board of Revenue (FBR) prior to the budget to voice their concerns, and they are also set to meet with the prime minister to resolve the tax regime change issues.
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