Recently, the coalition government has proposed the Budget 2022-23 and proposed new tax measures for the real estate sector. Increasing the Capital Gain Tax, advance tax for filers and non-filers, and tax on rental income are some of the measures taken.
Similarly, the government has increased stamp duty on urban properties to generate revenue from a multiplication in transactions and move towards parity with rates in rural areas.
Stamp Duty is a tax paid on the legal document when purchasing a property. It is a tax imposed on various documents, including those related to the sale or transfer of property, real estate, patents, securities, and copyrights. Governments impose these taxes as a source of revenue to fund government programs and activities.
In the new budget, stamp duty has been increased from 1 per cent to 2 per cent on urban immovable properties. The government has also revised the one-time tax on the construction of luxury houses of two Kanal and above. This new tax rate will apply to completing the construction of luxury houses from July 1, 2022. However, the old rates will be applied to luxury houses which submitted the completion till June 30 this year.
According to the new proposed rates, the tax rate for the Lahore District on two Kanal or above with a covered area of more than six thousand square feet of luxury houses has increased to Rs0.3 million per Kanal to a maximum of Rs 2.5 million, which was earlier Rs0.2 million per Kanal to Rs2 million maximum. For eight Kanal and above with a covered area of more than 12,000 square feet, the new tax rate is Rs0.4 million per Kanal to a maximum of Rs4 million.
Earlier, the Stamp Duty was levied at 3% of the DC rates of the property. However, in Budget 2018-19, the former government has ordered to abolish the DC rates and reduce the stamp duty to 1%. Although, due to the ongoing economic crisis, the government has increased property taxes to generate revenue from the real estate sector.
Leave a Reply