Property market situation after tax amnesty scheme
Recently government has passed the tax amnesty scheme bill for real estate sector. This bill is passed to ease the realtors’ pressure and also to bring investments back to Pakistan property sector. According to this bill, non-taxpayers can pay 3% tax on property purchase to be tax-payers or to whiten the black money.
Current situation of real estate market after tax amnesty
After tax amnesty scheme, investors are reluctant to invest in property sector. Only genuine buyers and tax-payers are buying affordable / cheap properties. Ghar47.com has discussed the matter with different real estate agents / investors about current market situation and according to the information;
Realtors’ views
According to the realtors, investors are not impressed by amnesty scheme as many consider it a big trap. According to realtors, once you are a tax-payer, you are under watch of FBR. People are afraid that FBR or NAB in future will ask the source of income or there can be changes in amnesty policy.
Investors’ views
Investors are very cautious now and will prefer to wait. According to investors, first problem is that if an investor avails amnesty scheme s/he will always remain under watch of FBR and has to fill tax return on annual basis. Secondly, investors in Pakistan are used to earn high returns on property investments in short period, like 20-40% profits on annual basis. But due to high taxes and uncertainty in the property market, now such high profit returns are not visible. Thirdly, investors have many good options to invest their money like STOCKS; 8% rise in stocks since amnesty scheme as approved.
Real estate agents are left with no more options
According to Bahia Town’s Realtor Arif Ali Khan, real estate agents are left with no bullets. They have no desire for more protests. Real estate agencies are closing their businesses on daily basis. More than 30% estate agents have left the property business and are forced to sell their properties and cars to make end meets. According to Arif, if the same situation persists for few more months, only 20% estate agencies will be operating in the market and these agencies will be the large property groups.
Property price trends
At the moment property prices are stagnant, but this situation will not last longer. Within few months we will see either rise or fall in property prices. Property prices in Pakistan are generally dictated by investors who have high buying power; the reason of high property prices in Pakistan. If investors once again start investing in property sector, we will see rise in property prices. But if investors take no interest in real estate sector and only genuine property hunters buy properties, property prices will fall as genuine buyers have low purchasing power.