The ruling by the Lahore High Court that the federal government cannot impose a tax on immovable property as income has come out. Yet, players in the real estate market have already begun preparations for a resurgence in the business of purchasing and selling plots. The federal government in the budget 2022-23 used the term Deemed Rental Income.
The proposal was that the rent for properties with a fair market value of 25 million or more will be considered 5 percent and it will be taxed at 20 percent per annum. For example, if the fair market value of a property is Rs.30 million then five percent rent will be 1.5 million and if 20 percent tax is levied on it, then this amount becomes Rs.300,000,
However, the? purpose of the proposal was that the government would like to impose tax on properties which do not have any utilization and those properties are held so that when the value goes up it can be sold at good price. These properties include open land, agriculture land, commercial and residential land which have been held only in anticipation of rising prices.
?In the proposal, six kinds of properties were exempted which were for personal use, residential or business purpose.
Moreover, the properties of government development authorities, land development and construction projects of builders and developers who are registered with Director General of Non-finance Business and Profession Board and the properties valued at less than Rs.25 million.
The people, related to the real estate are highly comfortable with the decision of Lahore High Court.
An owner of real estate project in Lahore said that the people, interested in doing