Finally the reality is about to happen - Real Value vs Declared value

[capsat]

Amendment in tax laws to streamline real estate investments; implementation from July 1 2016

ISLAMABAD: An important amendment has been made to Section 68 of the Income Tax Ordinance 2001 through the Finance Act 2016, which will be effective from July 1.Under the amendment, the property evaluation rate set by the provincial governments will no longer remain relevant.After that, all investors will have to get their properties evaluated through the valuers of the State Bank of Pakistan (SBP) under a new mechanism.One or more valuers of the SBP will fix the real market value of the immovable property and refer it to the FBR Inland Revenue Department.This amendment will do away with the informal economy or black economy in the real estate sector to a great extent.It will not only bring black money into the tax net but also put high penalties on tax evaders under Section 192-A.The penalties can amount to 100 percent of the evaded tax. These will be in addition to the additional tax imposed on the evaders.This amendment will direct unproductive investment to industry and as a result add to the Gross Domestic Product (GDP), creating job opportunities.According to an estimate, at present about Rs30,000 billion of black money is being used in the sale and purchase of property.

source

[sajidahmed]

Is this applies to new sale purchase or new declaration or on the previously declared property?
if it will on previous declared propert then how come one balance its assets

[capsat]

this will be effective for every property sale / purchase at the time of transfer from the value date July 01 2016.

as in a property in Civil lines Karachi the registered govt value for a 2200 sq ft apparment Rs. 600,000 in year 2000. where as it was for 2500000 : now in 2016 the actual price is 50,000,000 [ 50 million ] in June 2016 as per govt revenue its value is 10,000,000.

effective July 01 2016 the value is no longer valid. This has punctured the artificial boom and will stablise the market in next 6 months.
@ser_gtr @memad @xulfiqar

[qwertypoiu]

So its the end of the property bubble and nothing will sell now..
Another crisis in the making

No one will be buying any property here because they wont be able to prove that their income is legal. Or maybe government plans to turn a blind eye to the source of income and just enjoy the tax revenue..

Good step but lets see how people bypass this
Lets see how much is bani gala and raiwind worth now

Recently punjab added 200,000 tax to 1kanal houses which is again outrageous.

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[pistonhead]

This is a great step, as the real estate bubble will burst and people of nominal means will be able to afford respectable housing.
Right now, the market is ruled by rhe unscrupulous and black money which has resulted in prices & hoarding.

[SER_GTR]

This Will Help Bring Inflated Land Value Down To Earth And All That Non Taxed Black-Money Rolling Stop....!

Lets See How It Settles As Land Value Declaration Will Be Done Via FBR IR Dept.....This Also Means Seller Being Involved And Recorded Into FBR System....

[capsat]

carefully i can say .. residential and commercial properties located under Cantonment Boards / Military Estate Schemes / DHA will seek an exemption under some "Ordinance"

the hearsay is that from 2006 immovable property transactions will be shaken and filers will be exempted while non filers will be taxed and penalised

source

[s55]

Capsat, what's the update now? what's your analysis? I need a house for living, should I wait or go ahead with purchase?

[aakbar]

@capsat and all pakwheelers, I'll appreciate if you can give me your opinion. I'm in the middle of buying some property for investment in Islamabad in next 3-4 weeks. I'm a filer and have fully documented source of income. Can you guide me:
1. Is it good time to buy?
2. What is the long term prospect for investment property around Islamabad?
3. I heard due to depressed prices in Islamabad during the last few years, Islamabad property should go up in near future. Is that right given this new evaluation and taxation system in place now?

Looking forward to have some valuable input.

[shery_leo]

thanks capsat good information

[capsat]

short term investment in real estate is no longer feasible. invest in built-up property & rent it out through legal paper work. @aakbar

@capsat and all pakwheelers, I'll appreciate if you can give me your opinion. I'm in the middle of buying some property for investment in Islamabad in next 3-4 weeks. I'm a filer and have fully documented source of income. Can you guide me:
1. Is it good time to buy?
2. What is the long term prospect for investment property around Islamabad?
3. I heard due to depressed prices in Islamabad during the last few years, Islamabad property should go up in near future. Is that right given this new evaluation and taxation system in place now?

Looking forward to have some valuable input.

[ali_bin_farman]

short term investment in real estate is no longer feasible. invest in built-up property & rent it out through legal paper work. @aakbar

What about building a house and selling it?

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