Realtors Oppose Any New Property Tax in 2024-25 Budget

Realtors Oppose Any New Property Tax in 2024-25 Budget

Realtors have staunchly opposed any proposed tax hikes on property transactions in the forthcoming 2024-25 budget. The government has hinted at the possibility of imposing additional taxes on the real estate sector as part of its commitments to the International Monetary Fund (IMF), prompting significant backlash from industry stakeholders.

Muhammad Saeed, Chief Coordinator of the Property Dealers’ Association, voiced strong opposition on Sunday, underscoring the burdens already borne by property dealers. “We are currently subjected to five different types of taxes,” Saeed stated emphatically. “We cannot sustain any further taxation.” He highlighted that the current tax regime has led to a staggering 75 percent decline in plot sales within the city.

Saeed elaborated on the adverse impact of increased taxation, noting a significant shift in investment preferences among Pakistanis. “This is why many Pakistanis are now purchasing properties in Dubai,” he explained. He also pointed out the detrimental effect of the high 22 percent interest rate, which encourages individuals to deposit their money in banks to earn profits rather than investing in real estate.

The Property Dealers’ Association is calling for government relief and incentives to rejuvenate the real estate sector. “Unless the government reduces the interest rate and introduces incentives for the real estate sector, foreign investment in Pakistan will remain elusive,” Saeed warned. He drew a comparison with Dubai, emphasizing that despite its harsh desert environment, Dubai’s thriving real estate sector attracts global investors.

Saeed’s comments reflect broader concerns within the real estate community about the potential repercussions of additional taxation. Realtors argue that the current fiscal policies are stifling growth and discouraging both domestic and foreign investment. They assert that a more favorable tax environment is crucial for revitalizing the sector and stimulating economic activity.

The looming possibility of new property taxes has also sparked debates about the broader economic implications. Critics argue that increased taxation could further dampen an already sluggish market, exacerbating economic challenges. Proponents of the tax hikes, however, contend that they are necessary for fiscal consolidation and meeting IMF requirements.

As the government prepares to unveil its budget, the real estate sector remains on edge, wary of the potential for new fiscal measures that could reshape the investment landscape. The Property Dealers’ Association continues to advocate for policies that support growth and attract investment, emphasizing that a balanced approach is essential for sustainable economic development.

The outcome of these budgetary decisions will be pivotal in determining the future trajectory of Pakistan’s real estate market. For now, realtors remain unified in their opposition, urging the government to consider the broader economic ramifications of any new property tax.