Luxury tax to be imposed on lavish ICT houses

ISLAMABAD: The government seeks to impose a Luxury Tax on lavish houses located in Islamabad Capital Territory (ICT), according to Finance Bill 2020-21 tabled before the Parliament on Friday. The Federal Board of Revenue (FBR) has proposed the tax on houses of two to four kanals with a covered area of more than 6,000 square-feet at the rate of Rs 100,000/ kanal.

If the luxury house is constructed over five kanals or above with a covered area of over 8,000 square feet, the rate will be Rs200,000/kanal. In case of farmhouses over four kanals, including area under farming, having a covered area between 5,000-7,000 square feet, the rate of the tax will be Rs25/square-foot of the covered area per annum.

A farmhouse with a covered area between 7,001-10,000 square-feet will be taxed at the rate of Rs40/square-foot of the covered area per annum and for the one with a covered area of more than 10,000 square-feet the applicable rate of tax will be Rs50/square foot of the covered area per annum.

For farmhouses, having no under farming, and a covered area between 5,000-7,000 square-feet the rate of tax will be Rs60/square-foot of the covered area per annum, between 7,001-10,000 square-feet it will be Rs70/square-foot of the covered area per annum, and a farmhouse with covered area of over 10,000 square feet, the luxury tax rate will be Rs80/square-foot of the covered area per annum.