The government is considering implementing increased taxes on non-filers involved in the buying and selling of immovable properties, including trading files of plots in private housing societies. A move clearly aimed to document such transactions and prevent tax avoidance practices.

Currently, private housing schemes often evade withholding taxes by conducting file transfers without paying taxes. To address this issue, the Federal Board of Revenue (FBR) will introduce measures in the upcoming budget to ensure that buyers, sellers, and property agents involved in immovable property transactions pay their dues and are properly documented.

These legal changes will require the payment of taxes on plot file transactions in private housing societies, contributing to the documentation of immovable properties. As of yet, the government has already increased the tax rate for non-taxpayers purchasing property from 100% to 250%.

The FBR will update the valuation tables for immovable properties nationwide, in consultation with provincial authorities, starting from July 1, 2023. To facilitate this process, the FBR has requested the Board of Revenues in Balochistan, Sindh, Punjab, KPK, and Gilgit-Baltistan to nominate representatives for collaboration with the FBR’s teams.

These efforts align with the FBR’s ongoing taxation reform agenda, including the Pakistan Raises Revenue Project (PRRP) in partnership with the World Bank. The harmonization of property valuation between the FBR and provincial governments is a crucial component of this project.