FBR Increases Property Tax Rate in Punjab
Federal Board of Revenue (FBR) has recently accepted an increase in the tax rate on the sale and purchase of property put forward by the Punjab Land Record Authority (PLRA). The tax rate has been increased in Rawalpindi, Faisalabad, and all other cities of Punjab province. Furthermore, PLRA and FBR have issued notifications to all the concerned officers and employees to collect the tax from buyers and sellers according to the new rates.
Previously, the tax rate was increased and applied for buyers and sellers, and it was fixed at 2% for filers and 4% for non-filers. It is important to mention that non-filers are people who are not registered with FBR and do not pay taxes on transactions. However, now the tax rate is increased to 3% for filers and 6% for non-filers, and it is implemented from August 2023.
PLRA took this step due to the amendments that were introduced in Finance Act 2023. The amendments were mostly done to rates of income tax and related tax columns of Income Tax Ordinance 2001, section 236C, and section 236K. Now, the sellers and buyers will have to pay tax according to the new rates on sales, purchases, transfers, and other operations of the property.
Read Also: Property Tax In Pakistan: Everything You Need To Know.
The financial institutions have also made amendments to section 236K, which regulates the purchase of property. For purchasers, filers will have to pay 3% at the time of buying, however, non-filer buyers will pay an additional 3.5%. This means they will have to pay 10.5% of the total price of a property as sales tax, which is a high amount.
FBR and PLRA have revised the rates to increase income via property taxes. People who will not pay these property taxes will have to face legal consequences, as FBR has strictly directed all the officers to empower tax collection from the general public, project developers, and real estate agencies.
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