Govt panel proposes relief package for real estate, housing sector

ISLAMABAD: The Prime Minister’s Task Force on Housing has prepared a relief package for the real estate and housing sector recommending reduction in tax rate both for buyers and sellers.

The task force, headed by Minister for Housing Riaz Hussain Pirzada, has finalised a package which includes significant tax revisions and recommendations to revitalise the sector.

The task force’s proposals, presented to Prime Minister Shehbaz Sharif, suggest several measures to support the sector.

Some recommendations, if approved, would allow the construction of three-storeyed houses instead of two-storeyed residential buildings, offering full tax exemptions for first-time buyers of house and reducing property transaction taxes.

The task force has also recommended lowering the property sales tax from four percent to two percent, cutting the buyer’s tax from four percent to half percent, and eliminating federal excise duties on property transactions.

However, any rebate in taxes would be conditioned to permission of the International Monetary Fund, and the issue might be raised in Pakistan government’s meeting with the Washington-based lender, next month.

The recommendations also include providing housing subsidies for low-income individuals and offering loans for home construction through mortgage policy with repayment periods ranging from 15 to 20 years.

According to this policy under ‘Mera Ghar Mera Pakistan’, the plot would be mortgaged against release of loan for construction of house. It has also been recommended to increase taxable value of a house from existing Rs10 million to Rs50 million. It was also proposed to make the Real Estate Authority functional and place it under the minister of interior instead of the Ministry of Housing. The sources said that the prime minister has convened a meeting on February 03 to review the recommendations and make a final decision on the matter.