Islamabad, June 24, 2024 – The Federal Board of Revenue (FBR) has provided a detailed explanation of the new property tax rates introduced through the Finance Bill 2024.
These rates are designed to be progressive and vary based on the tax filing status of individuals, categorized into three groups: filers, late-filers, and non-filers.
Purchasing Property:
For filers, the tax rates on property purchases are structured as follows:
• 3% for property values up to 50 million PKR.
• 3.5% for property values between 50 million and 100 million PKR.
• 4% for property values exceeding 100 million PKR.
Late-filers face higher rates:
• 6% for property values up to 50 million PKR.
• 7% for property values between 50 million and 100 million PKR.
• 8% for property values exceeding 100 million PKR.
Non-filers incur the highest rates:
• 12% for property values up to 50 million PKR.
• 16% for property values between 50 million and 100 million PKR.
• 20% for property values exceeding 100 million PKR.
Selling Property:
The progressive advance tax rates at the source for filers on the sale of immovable property are:
• 3% for property values up to 50 million PKR.
• 4% for property values between 50 million and 100 million PKR.
• 5% for property values exceeding 100 million PKR.
For late-filers, the rates are slightly elevated:
• 6% for property values up to 50 million PKR.
• 7% for property values between 50 million and 100 million PKR.
• 8% for property values exceeding 100 million PKR.
Non-filers face a flat rate of 10% on property sales, irrespective of the property’s value.
Capital Gains Tax:
A flat 15% tax rate on gains from the disposal of immovable property acquired on or after July 1, 2024, is proposed for filers, regardless of the holding period. For non-filers, the tax is based on progressive rates as per the prescribed slab rates in Division I of Part I of the First Schedule, with a minimum rate of 15%.
The FBR’s explanation underscores the government’s intention to encourage tax compliance through differential tax rates, providing incentives for timely filing while imposing higher burdens on late-filers and non-filers. This structure aims to increase transparency and fairness in the real estate market, aligning tax obligations more closely with property values and ownership durations.
The introduction of these progressive rates is part of broader efforts to enhance revenue collection and promote a more equitable tax system, ensuring that all participants in the property market contribute their fair share to the national exchequer.
