The Federal Board of Revenue (FBR) has introduced a revised tax structure for property transactions in the current fiscal year, significantly increasing the withholding tax rates on sellers compared to buyers, reports have claimed.
New Slabs
People who are registered as tax filers now have to pay a minimum withholding tax of 4.5 percent when selling property. If the property is worth more than Rs100 million, the tax goes up to 5.5 percent. For non-filers, the tax is much higher, with a rate of 11.5 percent on property sales that exceed Rs100 million.
For buyers, the new tax rates are lower compared to sellers. Filers buying property worth up to Rs50 million have to pay a 2.5 percent withholding tax, while properties that cost more than Rs100 million are now taxed at 6.5 percent. Non-filers, however, have to pay much higher rates, starting from 10.5 percent and going up to a maximum of 18.5 percent, depending on how much the property is worth.
This change shows a shift in how the Federal Board of Revenue is dealing with property taxes, putting more pressure on sellers, especially those who are not part of the tax system. The goal of this policy is to improve tax collection and generate more income from the growing real estate market.
The Revenue Department collects these withholding taxes during the process of transferring property ownership and then sends the collected money to the FBR.
These new tax rules are part of the government’s ongoing plan to expand the number of taxpayers and stop property deals that are not officially recorded.
