Finance Bill 2019: Penalty proposed for non-banking real estate transactions

ISLAMABAD: The government has tightened rules for transactions of immovable properties and through Finance Bill 2019 it is proposed that non-banking real estate transactions would liable for penalty.

The Federal Board of Revenue (FBR) said that in order to ensure documentation of real estate transactions and also to ascertain the actual value of a transaction of purchase of asset, persons purchasing immovable property of fair market value greater than rupees five million and one million or more in the case of any other asset, would now be required to make payment for the said purchase through a crossed banking instrument so that transaction can be clearly identified from one bank account to another.

In case of non-compliance, the deductions in respect of depreciation and amortization in respect of such assets shall not be allowed. Further, the amount of purchase shall not be treated as cost for calculation of any gain on sale of such asset.

A penalty at the rate of five percent of FBR value of asset is being be imposed for violation of this requirement.

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