Karachi, December 26, 2023 – The Federal Board of Revenue (FBR), apex tax agency of Pakistan, has made it mandatory for individuals involved in attesting or registering immovable property to furnish a monthly property transfer statement.
The development, outlined in the updated Income Tax Rules, 2002, aims to enhance transparency and accountability in property transactions within the country.
Under the new rules, every person responsible for registering or attesting the transfer or right to use of immovable property, located in urban areas, must submit a monthly statement. The requirement applies to properties meeting specific criteria:
(a) Measuring at least 500 square yards or one kanal, whichever is less. (b) A residential flat with a covered area measuring 1500 square feet and above. (c) A commercial property of any size.
The registrar overseeing the property transfer or registration process is obligated to provide detailed information about the transaction. This includes the name and address of the buyer, National Tax Number (NTN) of the buyer, name of the seller, address of the seller, NTN of the seller, full particulars and location of the property, value of the property as per the deed of registration, and the date of registration.
The FBR has further clarified that the registrar should provide the Computerized National Identity Card (CNIC) number in case the National Tax Number is not available.
The definition of an urban area, as specified by the revenue body, encompasses regions falling within the limits of:
i. The Islamabad Capital Territory. ii. A cantonment board. iii. A municipal body. iv. In the case of Karachi, up to 40 kilometers from the outer limit of municipal or cantonment limits. v. In the case of Lahore and Faisalabad, up to 30 kilometers from the outer limit of municipal or cantonment limits. vi. In other cases, up to 10 kilometers from the outer limits of municipal bodies or cantonment boards. vii. Includes areas defined as such in the Urban Immovable Property Tax Act, 1958, and areas specified by the Federal Board of Revenue through notifications in the official gazette.
This initiative aligns with the broader objectives of the FBR to curb tax evasion, enhance fiscal transparency, and streamline property-related transactions. The move is expected to have a positive impact on the real estate sector, fostering a more accountable and regulated environment for property dealings.
As stakeholders adjust to these new requirements, the FBR underscores its commitment to ensuring a fair and transparent tax system, contributing to the overall economic development of Pakistan. Property market participants are urged to comply with the new regulations to avoid any potential legal repercussions and contribute to the broader goals of fiscal responsibility and transparency in the country’s real estate transactions.
