Historical Relief Package: Invest In Real Estate Sector of Pakistan Right Now
Real Estate investment considered as one the best business in Pakistan. Specifically this sector is one of the main pillar of economy and plays a vital role in the GDP of Pakistan. Despite the absence of any relief package, World Bank stated that almost 60 to 70% of countries assets are stored in the form of Real Estate investments. This sector is growing by leaps & bound right now. The confidence of investors further boosted up because of Prime Minister Imran Khan historic stimulus package to construction & real estate industry.
In the past 2 years, 2018 & 2019, the market was quiet low. Several aspects are responsible for this downtime. The salient one is the Amnesty Scheme 2019. Under this scheme, investors were bound to reveal income sources & other tax burden shackled the trust of investors. In this situation, many people took out their money resulting in slump in the overall real estate market.
Historic Incentives for Construction Industry
With recently announced relief package for construction sectors, Real Estate has emerged as a radically growing industry in the coming months based on the package declared by PM Imran khan on April 3, 2020. This scheme is inclined towards investors. It offers huge reliefs & incentives for the individual interested in real estate construction sector.
No Income Source Disclosure
You are not bound any more to reveal your source of income for investment. Earlier, it was made compulsory to show the income source. The main aim behind this decision was to catch black-money. However, in this present package, you can invest in without any such binding.
Particularly, this section will heighten the interest of the masses. Last year people refrained from heavy investments as they are afraid to entangled with FBR inquires. Thus, this move will surely benefits the Real estate Industry.
Fixed Tax Regime
It is another smart move by government of Pakistan to allure individuals. Fixed tax made applicable for property sector. In this type of regime, you will have to pay a certain amount disrespect of your income, assets or any other aspect. It also pull in the vast net of taxes.
Moreover, investment in Naya Pakistan Housing Scheme will further exempts you from paying 90% tax. You will only have to pay 10% tax. Also, the constructor will charged per square foot or per square yard.
Capital Gain Tax Reduced
No capital gain tax will applicable for the sold house used for domestic purpose. The minimum holding period for Capital Gain Tax has been reduced to 3 years again for constructed property. In 2019, it was increased from 3 years to 4 years. Meanwhile, for plots withholding period remains 8 years. However, the rate of tax may significantly be reduced on sliding scale from fourth year on wards .
Exemption from Income Tax
Any investment done by a person in shape of buying a land followed by any construction will be exempted from provisions of Section 111 of the Income Tax Ordinance 2001, which applies tax on a person who conceals income.
Similarly, if you starts a construction from an already owned land, you will also be exempted from the same clause of income tax. However, this clause is only applicable if you have made investment or started construction with due period from now till 30 June 2022.
Construction Industry Development Board
In order to make investment in a flow, an authorized board is set up to help people. With establishment of this board, there will be reduced chances of scams & frauds.
In lieu of the above stated relief package, you should put your money right now to earn more returns in limited time.