IMF demand: Tax on immovable property deals likely to go up

ISLAMABAD: On the IMF demand, there is a possibility of increase in the tax on the purchase and sale of immovable property in the federal budget for financial year 2024-25.

According to sources, the IMF has asked for increasing the advance tax on the purchase and sale of immovable property. In the talks between the IMF and the FBR, a number of proposals are being considered to increase tax revenue, including proposals to increase taxes on immovable property.

According to the sources, by amending Section 236K of the Income Tax, in the budget for the next financial year, a tax of 7% for non-filers and 3% for filers is likely to be levied on the purchase of property worth up to Rs.50 million. A tax of 13% for non-filers and 4% for filers will be levied on property worth Rs.50m to Rs.10m. The IMF has suggested that a tax of 35% for non-filers and 5% for filers should be imposed on the purchase of property worth more than Rs100m. In the next financial year, over Rs100 billion more revenue will be obtained. This year, 3% tax is imposed on filers and 10.5% tax on non-filers. Taxes on sale of immovable property have been increased by amending Section 236C of the Income Tax to levy the tax on sale of immovable property up to Rs.50m at 12% for non-filers; between Rs.50m to Rs.100m at 18% and the tax on the sale of property worth more than Rs100m at 35%.

For filers, proposed advance tax on sale of property up to Rs.50m has been increased by 3%, tax on sale of property between Rs.50m and Rs100m has been increased by 4% and by 5% on sale of property worth more than Rs.100m.