Property Taxes in Pakistan:
The government has introduced new property taxes in Pakistan on sale and purchase of real estate. This blog details out all taxes;
Non-filers
Non-filers have been allowed to buy property worth 5 Million PKR or more but they have to become filer.
Property Taxes to be paid by BUYER:
Stamp Duty = 5% as per DC Rate
Withholding Tax = 1% as per FBR Rate
Property Taxes to be paid by SELLER:
Capital Gain Tax (CGT) for PLOTS
A- 100% profit amount/gain to be taxed if plot is sold within 1 year of purchase.
B- 75% profit amount or gain will be taxed if plot is sold within 8 years of purchase.
C- No taxes on profits if plots are sold after 8 years of purchase.
Capital Gain Tax (CGT) for CONSTRUCTED PROPERTY
A- 100% profit amount to be taxed if constructed property is sold within 1 year of purchase.
B- 75% profit amount will be taxed if constructed property is sold within 4 years of purchase.
C- No taxes on profits if constructed property is sold after 4 years of purchase.
Capital Gain Tax (CGT) % Calculations:
5% Tax on profit amount less than 5 Million PKR.
10% Tax on profit more than 5 Million PKR but less than 10 Million PKR.
15% Tax on profit more than 10 Million PKR but less than 15 Million PKR.
20% Tax on profit more than 15 Million PKR.
Withholding Tax (WHT);
A- Withholding Tax is decreased from 2% to 1% for filers. WHT will be collected as per FBR Property Valuation Rate.
B- Earlier there was no WHT on purchase of property if price was less than 4 Million PKR. But now WHT will be collected on all transactions.
C- Earlier there was no WHT if property was sold after three years of purchase. Now WHT will be collected up to 5 years. But if selling property after 5 years of purchase then no WHT.