Government Under Pressure to Allow Property Sales of Up to Rs. 25 Million
The FBR is floating a proposal that will allow property sales up to a value of Rs. 10 million without the need for the buyer to show its source. However, this proposal has been criticized by members of the parliament who fear that it may leave huge loopholes in the system, allowing black money to seep into the market.
On the other hand, the Association of Builders and Developers has suggested increasing the exemption limit to Rs. 25 million for regular buyers and even up to Rs. 50 million for first-time homebuyers. However, tax officials are worried that these changes might end up acting as a long-term tax amnesty, which would allow people to avoid paying taxes on their wealth.
To try and prevent this, the FBR has recommended restrictions of property purchases up to 130% of the declared liquid assets of a buyer. In case the purchase is above this limit, the buyer would have to clear such income proof at the time of purchase. Further, the National Assembly Standing Committee on Finance has further. recommended that the meaning of “liquid assets” be enhanced to include things like gold, bonds, livestock, etc other non-cash assets. This would ensure that taxpayers do not have to sell what is already existing to acquire new property.
The FBR has also admitted that it does not have a perfect platform yet for buyers to submit proof of their resources during the time of the buying and selling of the property. Lawmakers have adviced that any new system proposed be tested to guarantee its effectiveness.
