KARACHI: The Pakistan Real Estate Investment Forum (PREIF) has submitted its proposals for the upcoming budget 2017-2018 to National Assembly's Standing Committee on Finance with the hope that the suggestion will be given high importance.
Shaban Elahi, President PREIF, in a statement issued here on Thursday, stressed that by implementing the proposals submitted by PREIF will not only pave the way for enhancement of local and foreign investment but will play important role to boost government's revenue manifold.
Demanding friendly federal budget for real estate sector, Elahi also urged the provincial governments to reduce provincial taxes such as stamp duty, Capital Value Tax (CVT), Town Tax and Registrar fee in order to minimize transactions costs. "It will not only benefit consumers but large number of people will opt for documented transactions instead of resorting to General Power of Attorney which prompts disputes", he added.
He informed that at present rate of provincial taxes on stamp duty is 2 percent, CVT is 2.5-3 percent, town tax 1 percent and tax on Registrar Fee is also 1 percent. "Total rate of taxes in the province is around 7 percent which needs to be brought down", he noted.
PREIF President also drew the attention of federal government towards the anomalies detected during the property valuation in some areas of country including SITE industrial area Karachi, Landhi Industrial area, Port Qasim Authority, DHA City Karachi, Anmol Cooperative Society Lahore, some areas of Faisalabad, and DHA valley Islamabad.
"Stakeholders were assured that the anomalies would be rectified but so far no practical step has been taken in this direction", Elahi added and demanded of the federal government and FBR to remove these anomalies forthwith.
According to government's official figures, Rs 76 billion worth of assets in Real Estate sector were documented in just five months.
For the first time such huge amount has been documented and became part of country's mainstream economy due to the new section 236W of the Income Tax Ordinance, he informed.
Shaban Elahi demanded reduction of the rates of taxes on property from current 2 percent to 1 percent for filers.
Similarly for filer seller the rate of such taxes should be reduced to 0.5 percent from 1 percent. However, for non-filers the existing tax rates may be upheld.
PREIF President also appealed to the government for further facilitation of real estate sector by enabling business friendly environment so that the local and foreign investment could be further increased.