With the new tax amendments, basic threshold of Rs 3 million for the application of withholding tax on the purchase of immovable property has been enhanced to Rs 4 million. Any transaction within one year will be subject to 10% gains tax above the threshold.
This means 5 Marla plots will be new turf of short term trading and their prices will be jacked up. This will be disadvantageous to smaller property buyers to build house. But as soon as it reached to 4 million then is the level playing field because it has entered into tax limit. By hitting 4 million threshold will have lost the advantage of being CGT free and may lost interest with short term traders.
HassanHC® replied on Sunday, July 31, 2016 04:28 AM
Zahid Saab short term trader is still happy as within one calendar tax year rate list is same. So do sale purchase at official price between July 1st 2016 to June 30 2017 will have no tax trigger. So 3 kind of ppl will gain the most.
A. PLOTS UNDER 40 LACS
B. SELL AND BUY INVESTORS DEALERS WITHIN SAME TAX YEAR TILL NEXT JULY 1 2017.
C. LONG INVESTORS OVER 3 YEARS
Win win for all |
Open Eyes replied on Sunday, July 31, 2016 06:21 AM
Everybody is focusing on CGT.....no one is talking about WHT impact, which will be the real killer for short term investors as from onward it will be calculated on FBR rate.....The negotiators are happy but in my opinion they miss this point (If base in increase then WHT rate must come down as Ishaq Dar advise to provincial governments to increase DC rate and reduce tax rates) |
SIM replied on Sunday, July 31, 2016 07:40 AM
You are right. Paying 4% advance tax on market value will be a big chunk of total amount. |
HassanHC® replied on Sunday, July 31, 2016 11:24 AM
In Pak avg plot gained 20% so ppl still want to buy.
Plus WHT is refundable when you file tax. |
User_6006® replied on Sunday, July 31, 2016 08:28 PM
govt have shaken the trust of investor successfully . no buyer in market you will see in coming days ,govt purposefully complicated all , only genuine buyer will be available in market , actually in my view in greed and haste govt kill his own earnings |
