Budget 2024-25: Pakistan plans to ‘get more tax from real estate sector’

The Pakistan Muslim League-Nawaz (PML-N) led federal government is set to present a growth-oriented budget for the fiscal year 2024-25 with an estimated outlay of over Rs18 trillion. Among various proposals, a significant focus is on the real estate sector, introducing a new tax structure aimed at increasing revenue while addressing the sector's concerns.

### Key Proposals for Real Estate Sector:

1. **Tax Slabs for Property Transactions**:
   - **First Slab**:
     - Filers purchasing property worth up to Rs50 million will pay a 3% tax.
     - Non-filers will pay a 6% tax for the same property value.
   - **Second Slab**:
     - For property worth Rs50 to 100 million, filers will be taxed at 4%.
     - Non-filers will be taxed at 12%.
   - **Third Slab**:
     - Filers buying or selling property worth over Rs100 million will face a 5% tax.
     - Non-filers will face a 15% tax.

### Recommendations from Real Estate Experts:

Real estate professionals, including Ahsan Malik, have forwarded several recommendations to Finance Minister Muhammad Aurangzeb to address the challenges faced by the sector and to mitigate the potential negative impacts of higher taxes.

1. **Reducing DC Rates**:
   - Propose a reduction of DC rates by 33% to reflect the actual market value of properties, aiming to make the tax structure more realistic and less burdensome.

2. **Income Tax Adjustments**:
   - Call for the elimination of the 3% income tax under Section 236C on land sales.
   - Suggest reducing the income tax on the sale of land and flats under Section 236C to 1% in the new budget.

3. **Tax for Non-Filers**:
   - Recommend reducing the tax rate for non-filers under Section 236C from 10.5% to 6%.

4. **Special Concessions**:
   - Advocate for special tax concessions for widows who are non-filers when purchasing property, to provide financial relief and support.

### Broader Budget Context:

- **Growth-Oriented Approach**: The budget is designed to stimulate economic growth, with a focus on fiscal management, revenue mobilization, and economic stabilization.
- **Sector-Specific Measures**: In addition to the real estate sector, the budget aims to address issues in agriculture, information technology, and exports.
- **Social and Economic Policies**: Emphasis on job creation and people-friendly policies to enhance socioeconomic prosperity.

### Conclusion:

The upcoming budget for FY 2024-25 seeks to balance revenue generation through targeted taxation while considering the recommendations from real estate experts to avoid deterring investment in the sector. By implementing these measures, the government aims to foster economic growth, stabilize the economy, and ensure equitable tax distribution.