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Finance Minister resolved property valuation issues successfully

On the issue of Valuation of Property and related tax matters, the Federal Minister for Finance held successful talks with the property evaluators from all over the country at the Federal Board of Revenue on late Saturday evening. The main points of this discussion as agreed are:

– Valuation has been agreed for major cities

– Valuation tables will be notified by FBR instead of valuation by SBP approved valuers

– Till such time and for those areas for which no valuation tables are notified, DC rate will apply

– Holding period for CGT(capital gain tax) has been reduced from 5 to 3 years

– There will be no CGT on property held for more than 3 years

– Properties acquired on or after 1st July 2016:

o If holding period is up to 1 year – CGT 10%

o If holding period is between 1 and 2 years – CGT 7.5%

o If holding period is between 2 and 3 years – CGT 5%

o If holding period is more than 3 years – CGT 0% / exempt

– Properties acquired before 1st July 2016:

o If holding period is less than 3 years – CGT 5%

o If holding period is more than 3 years – CGT 0% / exempt

– Valuation will apply on (i) CGT (ii) withholding taxes (iii) for the purposes of sec 111

– Basic threshold of Rs 3 million for application of withholding tax on purchase of immovable property enhanced to Rs 4 milllion

– Appropriate legislation will be done to give effect to the proposed changes as agreed with all stakeholders

Source: Ministry of Finance

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