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The Punjab government recently shared the deadline for availing reduced stamp duty on property transfers.
As per the government’s notification, the deadline of discount on stamp duty has been set for June 30.
Previously, the government had announced a reduction in stamp duty from 5% to 1% that could be availed until the end of this fiscal year. The deadline for that falls on the end of this month.
In order to incentivise the real estate sector during the coronavirus outbreak, the Punjab government not only deferred property taxes from urban immovable property but also reduced the CVT and stamp duty taxes to 2 percent on any property transactions.
According to Finance Act, 2006, the Capital Value Tax or CVT is levied at the rate of 2% of the recorded value. Property, either transferred as a gift or an exchange, comes under Capital Value Tax. If the transfer happens between parents, siblings or spouse – CVT is excluded in such cases.
The measure is expected to not only help boost the construction and real estate sectors, but also enhance economic activities around the country. This could be in the form of sale and purchase of properties and construction materials, or the construction of immovable properties.
Federal Board of Revenue (FBR) has also started reviewing valuation rates of real estate sector in all major cities of the country on eve of upcoming budget (2020-21).
“The FBR has formed different committees to evaluate valuation rates of property sector in different cities at level of field formations but it is not yet known whether these rates will be revised upward or kept at existing levels in the next financial year”, according to top FBR official.
The FBR sources said that the construction package announced by the government through Presidential Ordinance in April 2020 would be granted legal cover through upcoming Finance Bill 2020.
The FBR held meetings with concerned stakeholders including with Association of Builders and Developers of Pakistan for consultation just ahead of the upcoming budget. The ongoing exercise may result to up-date the valuation tables of immovable property notified under sub-section (4) of section 68 of the Income Tax Ordinance, 2001.
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