The federal excise duty (FED) imposed on the transfer of plots and commercial properties through the Finance Act 2024 is expected to be repealed as part of efforts to revive the real estate sector, Business Recorder reported.
Sources revealed that the tax measure failed to generate the expected revenue in the first half of the fiscal year 2024-25, prompting the Federal Board of Revenue (FBR) to consider its removal. The proposal, if approved, could be implemented in the upcoming federal budget.
The government is exploring options to reduce transaction taxes on property dealings to stimulate investment in the real estate sector. A meeting of the task force on housing sector development, which has been delayed twice due to the Prime Minister’s schedule, is expected to be held this week.
The task force has recommended abolishing Section 7E of the Income Tax Ordinance, eliminating the capital value tax (CVT) in Islamabad, and lowering transaction taxes on property sales. It has also suggested standardizing stamp tax rates across provinces and the Islamabad Capital Territory through the National Tax Council, ensuring a uniform taxation policy.
Additionally, the task force has proposed waiving wealth reconciliation for investments in real estate and construction projects up to Rs50 million, aiming to attract more investors to the sector.
