UBG proposes measures to revive housing sector, unlock $100bn investment potential

LAHORE: Former President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Patron-in-Chief of the United Business Group (UBG) SM Tanveer has proposed measures to revive the housing sector, aiming to prevent capital flight and unlock an estimated $100 billion in investment potential.

Tanveer emphasised that swift government action could pave the way for robust economic recovery and sustainable growth. He highlighted that the construction and housing sector serves as the backbone of the economy, with 72 associated industries generating significant employment opportunities and driving economic activity.

He suggested that the government reduce withholding tax on property transactions to 1.0 per cent to make property investments more attractive. Declaring the first property purchase tax-free would promote homeownership, while eliminating the 3.0 per cent federal excise duty (FED) on property transactions, which is legally unenforceable in provinces, could ease the financial burden on the sector. Tanveer also pointed out that the concept of “deemed income” has significantly hindered growth in the housing market and requires immediate removal. He proposed the launch of a 10-year fixed-rate mortgage product linked to the 10-year PIB bond yield to enhance affordability for prospective homeowners.

He called on the government to encourage banks to classify construction as a priority sector, which, he argued, could drive broader economic development. Tanveer underlined the pivotal role of the housing sector in stimulating economic activity, creating jobs and attracting investment. He urged the government to adopt these measures promptly to capitalise on the sector’s untapped potential and curb capital flight.