Budget 2024-25: Govt all set to impose CVT on property transactions

ISLAMABAD: To expand the tax base and boost revenue collection in line with the demands of the International Monetary Fund (IMF), the government is anticipated to introduce Capital Value Tax (CVT) on property transactions in the Budget 2024-25.

It is reported that one of the budget proposals envisages CVT on real estate transactions for both filers and non-filers, with the latter obviously paying more.

According to the 2024-25 budget documents the filers will be paying a three per cent tax on a property procurement involving up to Rs50 million. However, the rate for non-filers is going to six per cent.

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Similarly, the property purchases falling in the range of over Rs 50m to 100m will result in the proposed tax jumping to four per cent in the case of filers and 12 per cent for non-filers.

If the property value is more than Rs 100m, then the proposed capital value tax rate will be five per cent for filers but 15 per cent for non-filers.

It is not solely the IMF exerting pressure on Islamabad to broaden its tax base to include the property and retail sectors. Industrialists, other businesses, and experts have also been advocating for this expansion.