Prime Minister Shehbaz Sharif has postponed his decision regarding a tax incentive package for the real estate sector due to unresolved key issues.
The Federal Board of Revenue (FBR) has expressed opposition to a proposal that would grant first-time buyers of homes, shops, or offices an amnesty of up to Rs. 50 million. FBR Chairman Rashid Langrial emphasized that such exemptions would constitute a tax amnesty, which the International Monetary Fund (IMF) has prohibited, as reported by the Express Tribune.
During a meeting of the housing sector task force, officials discussed potential measures to reduce property transaction taxes and eliminate the 3 percent federal excise duty (FED) on real estate transactions. While the FBR chairman supported the removal of the duty, some task force members raised concerns that tax cuts could lead to increased speculative investments in the real estate market.
Additionally, the government is exploring interest rate subsidies to make home loans more accessible for lower and middle-income groups.
The real estate sector in Pakistan remains largely unregulated, with agricultural land often converted into housing societies that frequently lack proper regulatory approval. The market is also grappling with an oversupply of plots and ongoing issues related to fraudulent sales of apartments and land.
