93.7pc of property transactions in Pakistan below Rs5 million: FBR

ISLAMABAD: Chairman, Federal Board of Revenue (FBR), Rashid Mahmood Langrial, on Monday revealed that the extent of undervaluation and misdeclaration in Pakistan’s real estate sector is evident from the fact that over 93.7 percent of property transactions in the 2023-24 fiscal year were valued at less than Rs5 million.

During a meeting of the National Assembly’s Standing Committee on Finance and Revenue, the real estate sector recommended amendments to “The Tax Laws (Amendment) Bill, 2024,” specifically advocating against requiring disclosure of the source of investment for property transactions up to Rs50 million.

Langrial said the proposed “Tax Laws (Amendment) Bill, 2024” would only impact about 2.5 percent of the population, and added that the legislation aimed at curbing economic transactions involving ineligible individuals and businesses would not affect 95 percent of households. Instead, this approach is intended to enhance tax collection, addressing an estimated Rs1.6 trillion shortfall attributed to the top 5 percent of taxpayers, compared to Rs140 billion from the remaining 90-95 percent.

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He confirmed that individuals investing in real estate would still need to disclose their investment sources, although efforts are being made to lower transaction taxes within the real estate sector. Last year, there were 1.695 million property transactions reported, with 93 percent valued below Rs5 million.

He further disclosed that of the total transactions for the 2023-24 fiscal year, only 3,250 (or 0.2 percent) exceeded a taxable amount of Rs50 million, while transactions valued at up to Rs5 million accounted for 1,589,328 (93.7 percent) of the total.