Property market is basically a business or trade of buying and selling lands or houses schemes as referred to in a financial dictionary. If we talk about Pakistan’s property market then it is surely a vast topic to discuss as the market conditions are not quite satisfactory.
The main issue here is that Pakistan’s property market is expeditiously falling down because of the new law enforcement and economic instability.
Following are some of the major reasons of Pakistan’s crashed property market.
- Money laundering
- Less no. of buyers
- Rapidly changing prices
IMPORTANCE OF PROPERTY TAXES:
- The taxation system of any country is submissive to their native social and economic aims.
- The demand for tax proceeding is likely to grow, particularly in the case of local government.
- Property tax is urged by the government in order to produce money for public services eg.
- Garbage management
- Road maintenance
- Fundraising schools
- Special homes
- General government services
- Law enforcement
- Helping other countries in need
- Security services
- Paying property tax actually means to help the local community.
IMPACT OF PROPERTY IN PAKISTAN AFTER BUDGET 2019:
- Non-Filers: Firstly, the good news is that from now along the Non- Filers can purchase the property more easily without any limit regarding budget but evidently they need to follow some rules proposed by the government. Moreover if the rules are not followed properly then the Non-filers will be granted to pay 5% of the property amount as a penalty. The percentage will be applied as per FBR rates. This will be a great impact on property as there is a majority of Non-filers in Pakistan around 19 to 20 lacs.
- No chances of gambling: Previously in 2016 and 2017 many people of different professions entered the field of Real Estate Property. After investing 10 lacs on their property, they gained 15 lacs of profit. But fortunately this scheme is wiped out for good and nowadays there is a complete process of documentation which guarantees the authenticity of a person involved in property market including brokers, investors and sellers.
- Capital Gain Text: Capital Gain tax (CGT) is a tax payable on profit made on the disposal.
Rate of taxation:
|Rate Of Tax||Year|
|10%||For the first year|
|7.5%||If sold during second year|
|5%||If sold during the third year|
These capital gains are intended to be calculated in agreement to the fair market value. Whichever property detain for more than three years will not make the seller accountable for the payment of CGT.
- The FBR value will be nearest to the market value thereby the complications in advance tax are going to be resolved. The government is taking keen interest in minimizing property valuation rate up to 80% of market value.
- Withholding Tax: Also known as retention tax which is to be paid to the government by buyer and sellers on a property deal. To understand the concept of WHT we must know:
- Withholding is minimized from 2% to 1% for filers. On the other hand filers have to pay 2% of withholding tax.
- It is required to be paid while reporting to sales actions.
- WHT will be composed on all proceedings nevertheless of property worth.
Karachi (the city of lights) is considered as the most populated and largest profit-generating city of the country. The Karachi’s property market has always been targeted by gambler and those who are involved in money laundering which has sadly affected the purchasing power of genuine buyers.
Talking about Karachi’s real estate market then there is a good news that Karachi’s property market never fails in providing their best effort for buyers and investors. Property dealers does not seems to be lethargic nevertheless of the crests and troughs of the property trade market.
Purchasing lands and homes in Karachi is the wish of most of the Pakistanis because of the brilliant architecture heritage. Due to these qualities Karachi is also considered as a financial and commercial capital of Pakistan.
3 of the best places to buy plots in Karachi:
- North Nazimabad
- Gulshan e Maymaar
- Bahria Town
Lahore is the second largest cities of Pakistan with nearly 8.5 million population. It is also known as the city of gardens as it has a wide range of parks and greenery. Regarding property market then it is studied that DHA Lahore market is comparatively slow in the past months and is considered as a heaven for buyers but a devastation for sellers.
Top 6 best places to live in Lahore:
- Model Town
- Punjab Housing Society
- Canal Housing Society
Islamabad is considered as one of the cleanest cities of Pakistan. It is grading lofty in the world of current real estate world. The growing population of the city is offering great opportunity for investors and sellers. Due to the above factors people are willing to buy plots in this city where there are so many accommodations regarding environment, safety, education and most importantly the beautiful view.
Being a capital city of Pakistan, Islamabad offers more suitable property prices as in other cities. The smart investment and purchasing strategies are high and bright. If you are thinking to buy any plot then you are probably surrounded by luxurious accommodations and the most desirable plots you ever wish to buy.
It is official that FBR has marked to diminish the tax rate on the sale of braced property. Which is one of the most satisfying news to hear nowadays.
Well, 2019 seems to be the most stable year in Karachi’s property market due to improved budget and new law enforcements regarding taxation processes. In order to increase the property market of Pakistan it is necessary to pay Gain tax for each and every individual.
The agreement on reasonable prices between seller and buyers can be a source of great opportunity to raise current property market value all over Pakistan.