Budget 2024–25: New Taxes and Impact on Real Estate

Budget 2024-25 - Real Estate 13062024

Pakistan’s fiscal budget 2024–25 introduces important tax reforms to increase government revenue and address industry challenges. The new budget imposes higher taxes on the auto, mobile phone, electronics, and real estate industries while increasing the salaries and pensions of government workers. Our blog examines the key changes and their expected impact on the real estate sector, focusing on the government’s strategy to balance fiscal responsibility and economic growth.

Budget 2024–25 - Real Estate

Real Estate Capital Gain Tax: Filers vs. Non-Filers: Budget 2024–25

Property income tax will be collected forever without any limitation on the holding period. The tax rate for filers is fixed at 15%, while non-filterers can face a tax rate of up to 45%, according to the slabs. The move is to increase government revenue and encourage more people to become taxpayers.

Immovable Property Withholding Tax

The withholding tax on immovable property has been revised. The current rate is 3% for filters and 6% for non-filters. The proposed changes are defined for filers (3%–4%), non-filters (10%–20%), and late filers (4%–6%), as reported by the media, indicating that the tax rates have changed.

5% FED on New Plots, Residential and Commercial Properties

A 5% Federal Excise Tax (FED) is imposed on new land, residential, and commercial properties. This new tax could affect the housing market and increase the cost of buying property.

Cement FED Rate: Rs. 2/kg to Rs. 3/kg (Budget 2024–25)

The FED rate on cement increased from Rs. 2 per kg to Rs. 2 per kg. This increase is expected to hike construction costs, which may affect the real estate and construction sectors.

For more information, please visit the government’s official website.

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