The government has completed preparations to establish the Real Estate Regulatory Authority, which will impose fines of up to Rs. 1 million and prison sentences of up to three years to address tax evasion and illegal transactions in the real estate sector.

Under the new regulations, unregistered individuals conducting business could face fines ranging from Rs. 50,000 to Rs. 500,000. Real estate agents providing false information may be penalized between Rs. 200,000 and Rs. 500,000. Additionally, wrongful property transfers could result in fines between Rs. 500,000 and Rs. 1 million, while failure to submit the required documentation may lead to fines of Rs. 50,000 to Rs. 200,000.

This initiative comes in response to demands from the International Monetary Fund (IMF) aimed at improving tax revenue. The IMF has advocated for stricter regulations in the real estate sector as part of ongoing discussions for the first review of Pakistan’s $7 billion loan program.

Policy-level talks between Pakistan and the IMF commenced today and are set to continue for two weeks. Following these discussions, the IMF review mission will submit its recommendations to the Executive Board. A final decision on the release of the next $1.1 billion tranche, along with potential measures regarding electricity pricing, is anticipated by the end of this month or early April.