Islamabad – Prime Minister Mohammad Shehbaz Sharif is set to review key tax recommendations put forth by the housing sector task force during a crucial meeting today February 6, 2025.
The task force was constituted by PM Shehbaz to address growing concerns over property taxation and streamline regulatory processes to boost the real estate and construction sectors.
The task force has finalized a set of recommendations aimed at easing tax burdens, improving transparency, and fostering investment. Among the key recommendations is the waiver of sub-section 2A of Section 236C, which pertains to the 7E declaration and its approval by the Commissioner. This move is expected to simplify property transactions and reduce bureaucratic hurdles for investors and homeowners.
One of the major recommendations includes providing basic exemptions for properties valued up to Rs. 10 million, ensuring affordability for low and middle-income groups. Additionally, the task force has recommended shifting non-resident verification to an online system via NADRA to streamline compliance and improve efficiency in property dealings.
Another significant recommendation is the abolition of Section 7E of the Income Tax Ordinance, which has been a contentious issue among property stakeholders. In addition, the task force has suggested standardizing and rationalizing stamp duty rates across provinces and the Islamabad Capital Territory (ICT), as well as abolishing Capital Value Tax (CVT) in Islamabad. Ensuring uniform taxation policies through the National Tax Council is also among the key recommendations to promote consistency in property taxation across Pakistan.
To encourage real estate investment, the task force has further recommended a waiver on wealth reconciliation for investments in the real estate and construction sector up to Rs. 50 million. This measure is expected to attract new investments and stimulate economic growth in the sector.
Additionally, the recommendations include revising property valuations every three years to reflect market trends accurately. The task force has also proposed introducing exemptions for transaction tax in specific categories, such as low-cost housing, government plots, and first-time homebuyers, to make homeownership more accessible.
Short-term recommendations include reducing the policy rate to a single digit, resuming the Mera Pakistan Mera Ghar (MPMG) Scheme to restore developer confidence, and reintroducing mark-up subsidies for low-cost housing loans. Other key recommendations involve launching financial literacy campaigns, collaborating with real estate developers to offer mortgage financing, and implementing low or fixed-term loans for 5, 10, and 20 years.
With these recommendations under consideration, the housing sector is hopeful that PM Shehbaz’s review will lead to favorable policy decisions, ultimately boosting growth and affordability in Pakistan’s real estate market.