23/Jul/2019
budget-2018-19.jpg

The government has lifted the moratorium on the purchase of property worth over Rs5 million by non-filers of tax returns but has closed the window of legalising black money through investment in real estate in order to welcome only genuine buyers.

“The previous government had imposed a restriction on the registration or transfer of property exceeding Rs5 million to a non-filer. It has been observed that the restriction has not achieved the desired goal of increasing the number of tax return filers, rather such restriction has been legally challenged in courts on the point of jurisdiction,” said Minister of State for Revenue Hammad Azhar while presenting the federal budget for 2019-20 in the National Assembly on Tuesday.

“Therefore, the restriction placed on the purchase of the immovable property may be withdrawn,” he told lawmakers.

He pointed out “if a purchaser of an immovable property pays 3% tax on the difference between DC (old and lower) value and the Federal Board of Revenue’s (FBR, current market) value of property, then he is not required to explain the source of investment of the said differential amount at present”.

“This is a permanent tool for whitening the undeclared money, which is against international tax norms. Therefore, it is proposed to withdraw the tax at the rate of 3% on the differential amount.”

Pakistan Real Estate Investment Forum (PREIF) President Shaban Elahi believes that the closure of the window of legalising black money would significantly impact the government’s revenue collection from the property sector.

“The (federal) government is estimated to have collected Rs60-70 billion in property tax. The closure of the window may slash the tax collection by 30-40%,” he estimated.

In addition to that, overseas Pakistanis have remained one of the biggest sources of investment in the real estate sector of Pakistan. They used to invest $7-8 billion a year. This investment would go down by 25-30%, he said.

Thirdly, the restriction would encourage a capital flight from Pakistan as investors would look for other investment avenues like Dubai, Canada or any other country providing investment opportunities, he said.

Azhar said the FBR had introduced valuation tables for immoveable properties in major cities. The rates notified by the board are still considerably lower than the actual market values. It is, therefore, intended that FBR’s rates of immovable properties would be taken closer to or about 85% of the actual market values.

“As the increase in FBR’s values of immovable property is going to raise the incidence of tax on genuine buyers and sellers, it is proposed that the rate of withholding tax on the purchase of the immoveable property may be reduced from 2% to 1%.”

At present, the withholding tax on the purchase of property is levied only if the value of the property is more than Rs4 million. There is a tendency to avoid this tax by breaking the transaction into amounts of less than Rs4 million whereas the actual value of the property is more than Rs4 million.

“In order to stop the misuse, the withholding tax on purchase is proposed to be collected irrespective of the value of the property,” he said.

Profit to be taxed at a normal rate

Pakistan had introduced capital gains tax (CGT) years ago. Capital gain is the difference between property purchase and sale prices, meaning profit. There were three slabs under the CGT regime, meaning if a buyer sells property within the first year of purchase, he was liable to pay 10% CGT, 7.5% on sale of property after the first year but within two years, 5% CGT on more than two years but less than three years and no CGT on sale of property after three years.

The government has withdrawn the CGT regime and would treat capital gains as part of the total value of the property and the capital gains would be charged at normal tax rates, “which are totaling around 30-35%,” Elahi said.

Azhar said capital gains would be charged 100% at normal tax rate if the property was sold within a year of the purchase. However, three-fourths of capital gains would be charged at normal tax rates if the property is sold in the second year of purchase.

“Income from capital gains on open plots is proposed to be taxed at 100% if the open plot is sold within one year and for a period up to 10 years. Income from capital gains on constructed property is also proposed to be taxed on similar lines when sold within a period of five years,” he said.

“In case a property is sold within one year, it shall be taxed as normal income. The tax shall be charged at three-fourths of the income if the same property is sold after one year,” he said.

At present, there is no withholding tax on the sale of the property if the property is held for a period of more than three years. This is in line with the holding period for taxability of capital gains, which is also three years.

As the capital gain is to be taxed under the normal tax regime even beyond the period of three years, it is proposed that withholding tax on the sale of the property be collected irrespective of the holding period to bring it in line with the proposed treatment of capital gains, he said.


23/Jul/2019
WhatsApp-Image-2019-02-07-at-2.12.21-PM-1-1280x640.jpeg


23/Jul/2019
Isloo-1280x1280.jpg

The political maturity of a nation is a guarantee to a sound future, and luckily the Pakistani nation is attaining this level gradually. Some experts could read the undertone of a positive change happening around us. The nation is moving towards a stable political system that could accommodate various strains at a time. These moments are precious. Those who tap this moment from the investment point of view shall be among the most successful tomorrow insha ALLAH.

Your own apartment in a lavish yet very economical luxury apartments’ project, the Capital Icon, would be the best decision you can make today in the above perspective. Its location is marvelous, and the features offered there, are exceptional.

Secondly, the prospects of a higher return on your investment in the Capital Icon as profoundly high for many reasons but among the most are as follows:

  • Islamabad as a favorite destination – this is an evergreen factor
  • Prime location – located on the 6-lane signal free Islamabad Expressway
  • Reduction in access time – with an up-gradation of the Islamabad Expressway, access time to major facilities shall be reduced further
  • Neighborhood – development in the PWD area that also connects to the Bahria Town, will increase the importance as the Capital Icon is right in front of the PWD
  • Arrival of more projects from the same group in the same area in the near future

Read the moment and ride the waves.


23/Jul/2019
Parliament-1280x1280.jpg

The Pakistan’s politics has entered into the functional phase of the general elections of 2018. The political activities have been getting intense by each passing day as major players have geared up their activities on the ground. This scenario is very important for all of us, and especially for ones who are working abroad as they cannot find the minute details of the political stage of the country. It could intensify a bit further.

In any scenario, your investment is safe if it is made in projects that have been founded on the sound legal basis. AlhamduliLLAH, the project of the Capital Icon has been developed strictly under the country’s rules and the regulations related to real estate and residential projects. You can find the authenticity of the Capital Icon on the website of the Capital Development Authority anytime you want.

The best thing about the Capital Development Authority is that it keeps a very watchful eye on the residential real estate projects to protect the investors’ rights. This activity could not be jeopardized by any political development whatsoever.

In this scenario, your investment in the Capital Icon luxury apartments is not only safe but more solid in terms of return on investment.

A complete peace of mind is all that we offer today and tomorrow.


23/Jul/2019
Monsoon-Islamabad-1280x720.jpg

On those rainy days

When the sky grows dark

I can feel the storm

Brewing inside of me

Clouding my thoughts

Weighing down my heart

I find solace in the

The grey clouds that move

Easily through the sky

They will carry me

To the clearing where

Rays of sunlight still shine

By Christy Ann Martine
============

The rain is fun, and especially when it falls nonstop during the monsoon in Islamabad. To make the most of this rain just spark the plugs of your 4×4 and leave your Capital Icon luxury apartment to hit Margallah hills in the next few minutes.

Enjoy the company of clouds with your loved ones!