Islamabad, January 27, 2025 – A high-level task force, established by Prime Minister Shehbaz Sharif, convened on Monday to deliberate on the pressing issue of high taxes on property transactions and its impact on the real estate sector.
The meeting, chaired by Federal Minister for Housing and Works Mian Riaz Hussain Pirzada, marked the second session of the Task Force for Housing Sector Development. Held at the Ministry of Housing and Works, it was attended by key officials, including Finance Minister Muhammad Aurangzeb, Minister of State for Finance Ali Parvez Malik, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial, and other members representing various government bodies and private sector stakeholders.
This task force, specifically constituted by the Prime Minister, aims to address challenges in the housing sector. It brings together representatives from relevant government institutions and private-sector experts actively engaged in real estate. Its primary goal is to develop actionable recommendations to revitalize the sector.
The task force has established four specialized working groups focusing on Taxation Issues, Access to Finance, Urban Planning and Real Estate Regulatory Authority (RERA), and a Growth Framework for Housing. These groups have been tasked with presenting well-researched and practical solutions to overcome the sector’s challenges.
During the meeting, a comprehensive presentation outlined critical issues plaguing the housing sector, including a 12-million-unit housing deficit, urban sprawl, inadequate urban planning, and insufficient private sector engagement. High taxation on property transactions, complex tax procedures, and overvalued property assessments were highlighted as significant barriers, along with low mortgage penetration and high interest rates on housing loans.
The task force discussed potential solutions, including introducing fixed-term low-cost housing subsidies and advocating for single-digit policy rates to facilitate affordable financing for lower-income groups. Members proposed innovative mortgage solutions such as incremental housing microfinancing, digital financing platforms, and stronger foreclosure laws to mitigate risks.
Taxation issues were a focal point, with the task force recommending the revision of taxes like under Sections 236C and 236K of Income Tax Ordinance, 2001, Federal Excise Duty, and stamp duty to stimulate real estate activity while ensuring affordability for low- and middle-income groups.
The establishment of RERA under a proposed RERA Act and a review of city master plans by regional development authorities were also emphasized. Additionally, incentivizing vertical expansion, removing barriers to public-private partnerships, and creating high-density zones to preserve agricultural land were discussed.
The chair lauded the task force’s efforts, emphasizing the housing sector’s potential as an economic driver. He vowed to deliver a comprehensive report with quantifiable, short-, medium-, and long-term measures to foster growth in the sector.