Daily Times

ISLAMABAD: The Federal Board of Revenue (FBR) and the real estate agents talks remained inconclusive for the second time on Wednesday when the real estate agents opposed the government’s plan to determine the prices of land from the Estate Bank of Pakistan or any other third party.

While a senior official of the FBR talking to Daily Times said that Real Estate Agents want relaxation in property Tax and if the association did not want to determine the land prices from the Estate Bank or third party then it should be provided some alternative.

After the negotiation, the real estate and the Builders Association while talking to the media opposed the government’s plan to determine the land prices from the SB.

He stated that “we have given the proposals to the FBR and we will meet again on Thursday (today) and if the government works on our proposals then we will transfer more than three thousand billion rupees investment to some other country. We are expecting that government will implement our proposal and it will change the law”.

On the other hand, a senior FBR official said that the association wants a four to five-year relaxation in the property tax and if they opposed the approved law then they should give an alternative method.

The government has proposed to establish a 13- member committee in this regard.

The government has made an amendment in the income tax ordinance 2001 to eradicate the earning of black money from the real estate sector and to evaluate the property at the market price that was announced in the current fiscal year budget 2016-17.

According to the new law, the FBR can refer the case to a third party to determine the property at the market price; if it cannot evaluate the matter itself. The government has implemented a fixed tax on builders, commercials, residential and offices. On commercial building a tax at the rate of Rs 210 per square feet has been imposed whereas for the properties situated in Karachi, Lahore and Islamabad the rate of tax would be different.

The property having the land of 750 square feet would be levied a tax at Rs 20 per sq feet whereas the property covering the land from 751 to 1500 square feet would be taxable at the rate of Rs 40 and the property which possesses land above 1501 square feet would be charged a tax at the rate Rs 70 per square feet. Whereas in the small cities the tax rate will be Rs 15 to Rs 35 per square feet.

Sources in the FBR revealed that the economies of the country did not take advantage of the investment in the real estate and only investors get the returns. The real estate sector evades taxes at a large scale. The sale and purchase of property is being carried out at a low price from the market value.