First-Time Home Buyers to get Waiver on Wealth Reconciliation Statement

Posted by: IIPS Category: Daily Insights Tags: Comments: 0

The government has announced that it will extend the exemption on wealth reconciliation statements to first-time home buyers. With housing already unaffordable in the country, a tax exemption for first-home buyers is important to increase housing affordability. Several real estate developers have addressed that the exemption is extended to the first-time home purchases of less than 50 million. 

Experts in the housing construction industry believe that the requirement of a wealth reconciliation statement from first-time homebuyers can decrease the rate of homeownership amongst the middle and lower-income demographic. However, it is not to imply that the waiver is given to large real estate investors and developers when they purchase land for a housing project as they have significantly benefited from the recent construction amnesty scheme. 

The wealth waiver to lower- and middle-income classes for first-time home buying is necessary as it will facilitate the process of homeownership. Currently, the SBP and the government are trying to solve the housing affordability issues through several housing finance policies. Traditionally, commercial banks are hesitant to lend for housing primarily due to the absence of effective foreclosure laws that will allow lenders to repossess a property without any judicial interference. In order to significantly increase the share of mortgages in the overall housing finance industry, the government needs to introduce effective foreclosure laws. 

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IMARAT Institute of Policy Studies

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