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Capital gains tax on real estate in Pakistan,

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   Breaking News
Saturday, June 13, 2009 10:41 AM 
Reply: >
10 percent capital gains tax on real estate sector is expected.
CMY replied on Saturday, June 13, 2009 10:58 AM 

Friends please note this new proposed tax IF imposed wont have any major impact on DHA property prices because in DHA Lahore trasfer transections are recorded by tax athorities based on current DC value ( Like CVT tax and stamp duty is bassed on this DC Value of DHA 6 7 9-10 etc regardless of where these plots are bought or sold and DC value for these phases is only 12.50 lacs.

So profits will be assesed on DC value at the time of sale. IF DC value is not changed you will pay no capital tax. Keep in mind DC value was recently changed only last years and was increased after many years.

Let say they increase DC value in 3 years to 13.5 lacs so you will see 1 lac profit so your capital gain tax in this case will be just Rs 10000.

Keep in mind DC values are not changed so often and the don't increase very sharply especially in this kind of week market Govt wont be able to change them soon since they were changed just last year. DHA wont let them raise DC value these too much and too soon.


Societies other than DHA may see lot of negativity due to this tax because there people don't pay tax as per DC value or their DC value is too much and cant be increased by Govt when ever they want but with DHA they can increase it to a the limited percentage after negotiating with DHA like last time.
observor replied on Saturday, June 13, 2009 11:29 AM 

I didn't hear of any capital gains tax in the budget speech though CVT has been increased from 2% to 4%.
CMY replied on Saturday, June 13, 2009 02:00 PM 

Great News

Looks like in final speech there was no capital tax on property YET. So it will be great news for property sector. Thiings are not clear yet. I am trying to gather more info on property related taxes. When I get enough info I will post it here.

If you get ny property tax info please share it here with the proper web link or source of info.
CMY replied on Saturday, June 13, 2009 02:20 PM 

2% Increase on CVT means more costs on transfer
DHA 6-7 and transfer cost will increase 25000
DHA 8 proper transfer cost will increase 40000
DHA 8 parkview transfer cost will increase 60000
khan replied on Sunday, June 14, 2009 09:40 AM 

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khan replied on Sunday, June 14, 2009 04:33 PM PST

Dear Friends as per new budget the property transaction will require NTN no and every body with an NTN no will have to file tax return even if they dont govt knows all the assets listed on the ntn of an individual so it will be a piece of cake for the govt to impose wealth tax which already prevails in pakistan for every body whose net worth is 10 lacs and above.
I spoke with a Tax lawyer as per him buying property may not be a problem even the prices might be same for some time but holding the property will be just like inviting tax trouble for sure.
ultimately the demand will come down and for sure the prices will come down too.
GOOD NEWS for genuine home buyers.
Any body felt offended with this discussion please accept my apologies.
Thanks
Khan
Waqar Latif replied on Monday, June 15, 2009 06:20 AM 

"Inflation rate has declined to 14.4 percent and it will further decline to single digit in the next fiscal year"

>>>I doubt on this line, when i go to actual market everything is going up. How come Inflation rate is down?
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