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New tax regime may have following implications.
Reduction in foreign remittances.
Reduced economic activities.
More unemployment consequently more lawlessness and crimes.
Flight of capital from the country.
Investors will shy away.
Less revenue collection.
More misuse of public money.
Another door to corruption.
Could have been done in pragmatic way for the benefit of the Country and masses

Tax

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Ppl specially who are expats will not sell their plots before 5 years to avoid tax.. so many ppl who were thinking of switching investments will also stop... So there will be less sellers in the market at the same time.......
Those who want to sell before 5 years in near future may increase the demand to cater tax issue....So property prices may not necessarily fall as much...

inactive file to active filer

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Hello everyone,
i am overseas resident and inactive filer.
how can i move to active filer status online.
Thanks

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IMPORTANT (Please read and spread)

   The current increase in multiple taxes on real estate can have serious impact on all DHAs. These DHAs are primarily meant to provide some relief to retiring Military officers, who generally run from paycheck to paycheck throughout their service. One or two plots allotted in DHAs are the only assets mostly have for funding our post retirement expenses.

       As per Law DHAs are supposed to be similar to Federal or Provincial authorities like CDA or LDA. However there is one discrimination faced by DHAs. Govt agencies like LDA CDA etc get Federal government and Provincial government grants in their budget to finance the infrastructure development. In addition large projects like hospitals, universities and  Metros etc are funded by Federal or Provincial PSDP. On the other hand DHAs do not have this facility. They are funding their own infrastructure development, and for routine civic services residents pay fixed fees.

        With newly levied taxes on Property DHAs will be collecting huge taxes for Govt and in return will not get anything. We need to propagate to concerned authorities to take the case with Govt for eradicating this discrepancy. Either Govt should fund the large infrastructure projects in DHAs also as its done for LDA CDA etc, Or the Taxes collected by DHAs be kept with DHAs for this purpose.

       Please don’t mind I really feel robbed by the Govt and intend Posting this info multiple times for max circulation.

Impact of Taxes

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Although more details have still to unfold but New taxes will have following direct impact.

Real estate sector will slow down.
Investors will be discouraged as most of money they have is Black, Although people who transfer the property are overseas and have no issues. But most of people who give hype to market are investor.
It is easiest business to buy affidavit file for local investors and foreign investor like me never indulge in affidavit files as they cant be transferred readily. Now Local investors ill have to shown white money to buy such files which they normally don't have. If demand and price of affidavit file will decrease it will also show the effect on Allocation File, as both are linked.

All files and in pipeline properties will be hit hard houses and mature properties which are used by end users will go down.

But eventually property will slowly grow in course of months and years as previously happened not like in days and weeks and most of owners will be overseas.
This white money issue is very touchy and my be revered in Coming days.
DHA and army may react to it as well, for solder and army officer it is big attraction to get a plot at low rates near end of service, All the life they remain hand to mouth. Slowing of real estate will be a big impact on their benefits

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A filer means one who has filed a legitimate Income Tax return for the last completed tax year and have proof of its filing, non other person is treated as filer in the eyes of law.

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If a person has tax number but inactive for the last 6 years as he is not in Pakistan, will he be a old filer if make it active or will be new filer

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Retards supporting new tax from Noora League, formula is simple. TAX do or Tax lo. If they pay only 5,000 tax on their billions and evade tax using off-shore companies,, why the hell shall we pay taxes?

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If some one have plot in DHA 7-8 and they hold it more than 6 year. How the new Tax system will effect it. Thanks

Tax from tomorrow onwards

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CGT is the tax that will topple the market. Not the Advance tax for increased DC rate nor the increase in registry etc. There are two opinions about this tax:

1. Govt has announced that it will be 10% of market value of property
2. Principally and logically it should be applicable to the profit proceeds on sale of property (cost of buying - sale price = profit)

However either ways, its a complete disaster.

For sale of a Kanal plot in DHA from Phase 1 to 8 which was bought and registered in last 5 years, with a current average market value of 2 Crore Rs, seller will be paying Capital Gain tax as below:

1. If 10% of market value then CGT levied alone on this plot is 20 lac Rs !!! So sell the plot of worth 2 crore and pay 20 lac as Capital Gain Tax !!!

2. A slightly lesser but equally devastating option would be to compute CGT on the actual gain (cost - profit basis) by below formula:

CGT = 10% of (MVP (Market Value of Plot) - DVP (Declared Value of plot at the time of purchase))

DVP (Declared Value of Plot declared at the time of property purchase in last 5 years) = DC Rate Value at the time of purchase = approx 70 Lac/Kanal (Average DC Rate for DHA Phase 1-5 for last 5 years)

So CGT would become = 10% of (MVP (2 Crore) - DVP (70 Lac))

= 13 lac Rs

Also remember that 1% advance tax will be added on top which will be 2 lac in this example. So total tax paid (including registry/transfer and stamp duty)= minimum 20 lac to 30 lac on a sale of every 1 kanal plot in DHA Phase 1-8 from tomorrow onwards


God help us all !!!!
:o

Is the bubble about to burst ?

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I posted a Message about property bubble in Pakistan soon after Cmy released his property Analysis audio and CLEARLY Said there is no Bubble in the Market,
I gave a detailed analysis How this is a Bubble and may burst any time

I have a Feeling from now onward you will see a major impact on the prices, Prism Nearly Doubled in past 4-5 months which was extra ordinary !

80% of the market is black, Just imagine when they pull out from property market, what happens then, I am sure few big fish can bribe and get away from FBR, But how will the majority Show their means and how they earned their money.

Increase of tax here is very minor compare to the issue of black money,

If there was only the issue of higher taxes, there might be a correction of 4-5 lac average on 50 lac property,

But the change in law will also ask you to provide the way you earned the money< this is a major issue and will have huge HUGE consequences in both short and long term
Because even if your money is Halal, very few Pay taxes

Foreign Investment is not looking good either, Eu is on the Brink of a Major Recession again after brexit

GCc and saudi Companies are letting go of staff !

Political uncertainty, Qadri is back and this time PPP is with Imran Khan, And for those how really think Nawaz Sharif underwent a heart bypass, ALLAH help you


I have a Prediction, Property Market will at least Reduce by 30-50% in next year or so !

I also Mentioned in my previous message how I feel bad for people who bought the property when prices were inflated,

I have a Feeling DHA and Other Developers knew this was coming and with the help of few Property dealer they inflated the market,by holding or buying the property from market !

I am not a supporter of PMLN, but if they implement this properly, it is an excellent step !

A bubble is when you have unnatural growth compare to other economic and social factors(See my last post),
this was bound to happen, and I never predicted this severe
From now on relax for a few days see what the outcome is.

Do NOT go into the FRENZY of selling the property as this will make the situation worse and will hugely effect the people who just brought properties in the last few day/months

And Please Please Please stop relying on Property Dealers they are Half involved in the price hike rest half is Black Money,

I Know I am going to get a lot of criticism over this, I will try to answer as many as possible.

Golf View Residencia Bahria Town Lahore

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Guys! do you agree with Malik Riaz statement that development in GVR will be started right after Eid??

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DEAR Jameel bhai,
Please advice if some one have plot in DHA and they have bought it more than 6 years. If some one to sell it now then how the new tax system will effect on it. Thanks

New taxation on real estate

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As per new tax rules, CGT will be valued at market price of property only which will be collected by federal government. While stamp duty and CVT will be charged at DC rate by provincial government. So chill and don't worry much. It will be cleared in coming days.

Property Evaluation and Taxation

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This indeed is very depressing situation for overseas Pakistanis. A totally insane decision by the Govt. (where owls are the decision makers).

All this tax money will go to off shore accounts and high rise buildings in Dubai courtesy of Sharif and Ishaq Dar family!!

PML(N) Govt. has increased Pakistan's debt to such an extent that payback requires sucking the blood of Pakistani nation. We are to blame ourselves for electing such thugs and looters as our rulers and so called leaders.

FBR is known to be one of the most corrupt institutions of Pakistan. I am sure they will create a total mess of this situation and make the life of common Pakistani miserable.

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Dear LRE Team,

Please evaluate current market price for following properties.

1. 1720 T, DHA Phase 7, 10M
2. 978 N, DHA Phase 9, 1 Kanal

CONFUSION ABOUT FEDERAL RATES

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There are many questions connected to new Law and will be practical problems in if not addressed properly

These are many questions Connected to
1. DC Rate was By Govt of Punjab, People were not Fixing it will this abolish altogether why it cant be reformed

2. DC rate is is already about 60% of Market Value in stable areas only in areas with recent gains it is low and that is negligence of Govt not of people.

3. In Hyped Market or Slump period Market are too Dynamic, Moving in weeks Up and Down that is why previously margin was there in DC rate To accommodate bad location and areas just out of Boundary of societies how they can make this mechanism so dynamic,

4. When we Buy a property we make an estimate of buying price, then taxes etc which are Fixed at what stage valuation of property will be done by Tax authorities, Can seller get it fore hand and for How many days it will be valid?

5. Regarding source of white money when we have to prove it? Like I purchased a plot and went to USA how I know at what time FBR will come into action and will send me notice? and how can I present may case staying abroad? Corrupt officials will use this handicap for earning hefty bribe and overseas investment in real estate sector will be discouraged. Will the Govt make it possible to do all these formalities before Purchase.

Looks that people who are implementing this Law or commenting on it, either don't know the basics that these rates are fixed by Govt not people so there is No Provision of under reporting the sale purchase value.
May be it is war between Feral And Provincial Govts and Fedral Govt is Not happy about DC rates, I am not sure may be these rates are too low in other provinces that is why Fedral Govt want to come into action. May be fedral Govt want to hire third party to Fix values not as per DC rate but FEDERAL RATE, If that happen that almost nothing will change in Lahore at least where already DC rate is High. And next month We will be referring to FEDERAL RATE in place of DC rate

I myself believe and real estate agents know that 90% buyers are overseas and have white money. That Balck Mafia which public referring to is Just small fraction or biana Investors who pay 5 Lac on Kacha Biana paper to trade and get money out of deals, I have never seen Any Blackia transferred 100s of Plots in his name legally, Maximum they buy Affidavit file or gamble in Open file business or illegal societies. How they will Escape in this system
How this valuation will help to calculate gains when no documentation of sale deed is registered for Last many years and DC rate was Black bone of System.

Coming days will answer these questions.

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after this heavy taxation, this business is dead atleast for a while. the question is where would the money go instead? there are two types of investors
1. local investors who cannot do active business like setting up a shop or industry or farming etc bcoz of old age or no experience or difficulty of doing business in pakistan due to law and order/ corruption etc. they used to keep money in banks for profit which is already on historic low, so they started investing in properties which is also gone now. stock market is very tricky and not everybodys cup of tea as there is a wide belief that its a risky affair where yu can lose all yur savings overnight.
2. overseas pakistanis who only invested in properties as they cannot set up an active business owing to general dishonesty prevailing in our society. after years of being tricked and looted by BROTHER IN LAWS OR COUSINS overseeing their businessess, overseas ppl now only invest in properties and nowhere else.things are not good in Middle east due to oil crisis, Europe after Brexit and USA due to fear of Trump getting into power.
QUESTION IS WHERE WILL ALL THIS LIQUIDITY GO?

Price Update

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Where has gone the list of price update? What does it indicate? The matter is very serious and it is not about heavy taxation only; I think the buyer has to show that his money is white and he is tax payer/filer; from where would you get such buyers. And the seller has to show from where he had that property. If this is the case there is complete disaster and holders of property would be stuck but for how long? comments please.

new amendment pos and cons

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so practically DC rates were used to calculate taxes now valuer will evaluate according to market which means 5 times more taxes , on other hand people near govt projects whose land used to be grabbed and offered dc rate now wont suffer a lot ,
but how will valuer evaluate who will control market rate , will total mechanism going to change like in pak arab plot is 15 lac per marla while in wapda 10lac merla will SBP correct these things too ,and how they will see certain change in rate in current market , i think govt cant be that much intelligent they just put more taxes so everyone can pay weather its white money or black just by discarding dc rates . this is what it's all about ???