The need for housing units has also been increasing with the great surge in the population of the country with every passing day. The current capacity of developers in the country is to deliver only 150,000 housing units per year, but the actual demand in Pakistan stands at 350,000 new housing units per year. This leaves a shortfall of 200,000 units each year.
Also due to Covid-19, human life around the globe came to a halt. Every sector, whether it was the financial sector or the health sector, was greatly impacted. Like other sectors of life, in the lockdown period, the sector of construction was deeply impacted as the construction all over the country stopped and the related industries were also deeply impacted.
The construction and related industries suffered a lot, the investors and shareholders suffered the most during the lockdown. To help them once again stand on their feet once again, the government of Pakistan stepped forward and announced an influential incentive package for the construction industry that includes a subsidy for the Naya Pakistan Housing Project (NPHP) of Rs30 billion so that people could afford to build their dream house. Prime Minister Imran Khan announced this construction relief package after which this relief package for construction industry in Pakistan has been warmly welcomed by all concerned stakeholders in the industry.
PM Construction Relief Package Benefits:
More incentives for the construction relief package benefits in 2021 were announced by the Prime Minister of Pakistan, Imran Khan such as
End of Capital Gains Tax (CGT):
Capital Gains Tax (CGT) is a federal tax to be paid by the seller of the property. When the seller makes capital gain (profit) on selling property (capital asset), the capital gain is again taxed. According to the Finance Act 2017, Capital Gains Tax (CGT) is imposed only when the property is sold within three years of its purchase. The rate of taxation if property is sold is 10% for the first year, 7.5% for the second year, and 5% for the third year.
Previously, the government used to charge around 5% to 20% Capital Gains Tax (CGT) on the sale of capital assets. After the introduction of this tax relief package for the construction industry in Pakistan, the practice of collecting CGT has been abandoned. This will allow people to easily sell their properties during this pandemic situation. Before the dissolution of this tax, people in the need of liquid money could not sell their property as the buyers were also struggling with the effects of the Pandemic.
The concerned authorities have also bisected the advance tax percentage from 10% to 5%, which is applicable to the sales of immovable assets across the country. Along with these extremely noteworthy and beneficial incentives, a significant decrease in the sales tax was also made in collaboration with the provincial administrations.
Tax relief for construction at a small level:
This package is the first of its kind offered by a government in Pakistan by which both small and large scale investors are content. It is often termed as the relief package for the construction industry in Pakistan as it is the very first time in the history of Pakistan that such incentives were offered to the construction industry. The builders and developers were offered a tax amnesty scheme. The developers and builders of the housing projects of small budget across the country now enjoy a 90% tax exemption.
They have also been exempted from paying the withholding tax on the purchases made for different types of construction materials and other related services. This exemption is on all construction-related goods and services except steel and cement. These incentives also directly benefit the investors of the Naya Pakistan Housing Scheme, speeding up the development of the project.
Income disclosure for FBR tax reduction:
The Federal Board of Revenue (FBR) recorded Rs186 billion worth of development projects all over the country, whereas, projects worth Rs116 billion worth of projects have yet to be registered. Projects worth Rs163 billion have already started in Punjab. In addition, development activities have also been initiated in Sindh, KPK, and Balochistan.
These incentives are expected to generate economic activity worth Rs150 billion in Punjab alone and generate employment by adding 0.25 million jobs across Pakistan.
Taking around 163 projects onboard worth PKR 136 billion and collaborating with the Federal Board of Revenue (FBR), the government announced the fixed tax scheme under the banner of the relief package for the construction industry in Pakistan. The investors of the projects registered with FBR have been given exemption from disclosing their sources of income.
Salient Features of PM Construction Relief Package:
- The date for the disclosures of sources of income for investors has been extended till June 30, 2021, and buyers have till March 31, 2023, to disclose their income sources.
- The deadline has also been extended by one year for the completion of the projects on board with the FBR tax amnesty scheme.
- According to the latest incentives and the directives of the State Bank of Pakistan (SBP), the commercial banks will continue to offer loans worth PKR 378 billion up till December 2021 for housing finance to the general public. It will only be valid for the construction of houses, targeting the people who want to build their own homes belonging to the low-income group.
- For the construction of low budget houses, the government is also offering a subsidy with an allocated budget of PKR 30 billion. A maximum of 5% and 7% subsidized interest rates will be paid by people to construct 5-marla and 10-marla, respectively. The provided subsidy will cover the mark upon loan acquired for building low-cost houses. The government will also provide an additional grant of PKR 300,000 for each of the first 100,000 constructed houses.
All these initiatives hint towards the economic progress and prosperity of the real estate sector of Pakistan.
So if you fall into any of these categorizes described above, it will be a good financial year for you as the tax is exempted from the construction sector. For further details contact Pakistan Property Services or visit our Youtube Channel.
Projects We Deal In:
- Bahria Town Lahore
- Bahria Orchard Lahore
- Bahria Nasheman Lahore
- Bahria EMC (Bahria Education and Medical City)
- Bahria Town Karachi
- Bahria Homes
- Bahria Paradise,
- Bahria Paradise Villas
- Iqbal Villas
- Quaid Villas
- Liberty Commercial
- Bahria Sports City
- Bahria Sports Villas different precincts
- Bahria Farm Houses
- Bahria Golf City
- Bahria Heights
- Bahria Apartments
- DHA in all cities of Pakistan
Many residential and commercial societies in Pakistan are evaluated carefully to help our clients make the most better decision. Pakistan Property Services helps the clients invest in projects with good prospects that depend upon the parent company, developers, location, payment plan, amenities they can have in the desired project.
Lahore is the cultural and economic hub as well as the provincial capital of Punjab. The city is well known for its huge economic opportunities in different sectors. People come from different areas to grab these opportunities and have a residence here. Below the list of some of the top Projects in Lahore:
- Bahria Town Lahore – Your Luxury Lifestyle Destination!
- Bahria Town Lahore Sector A
- Bahria Town Lahore Sector B
- Bahria Town Lahore Sector C
- Bahria Town Lahore Sector D
- Bahria Town Lahore Sector E
- Bahria Orchard Lahore – Your Luxury Lifestyle Destination!
- Bahria Orchard Phase 4 Lahore – A Detailed Overview of Bahria Orchard Phase 4
- Bahria Orchard Phase 4 Lahore – Location and Monthly Plots Prices Analysis
- Bahria Nasheman Lahore – Your Luxury Lifestyle Destination!
- Bahria EMC Lahore (Bahria Education and Medical City)
- Times Square Mall & Residencia
- Lahore Smart City (LDA Approved Project)
- Union Luxury Apartments Lahore or Union Heights Lahore in Etihad Town Lahore
- Cosmetic Planet in Times Square Mall & Residencia
- Al-Rehmat Project by Bahria Town Lahore
- Jasmine Avenue Homes Lahore
- Marina Apartments Lahore
- Shadman Enclave Housing Scheme Lahore
- The Gold Souq in Bahria Town Lahore
- Blue Town Phase 1 Sapphire Lahore
- Top Best Residential Housing Societies in Lahore
- Name List Housing Societies on Raiwind Road Lahore
- List Housing Societies on Raiwind Road Lahore
- Icon Valley Lahore
- Pearl One Tower Bahria Town Lahore
- Best Housing Societies on Sharaqpur Road Lahore
- Best Commercial Projects with Easy Installment Plan in Bahria Town Lahore
- Dream Housing Society Lahore
- Low Cost 8 Marla Plots in Bahria Orchard Lahore
- Lahore Fortress Apartment Homes
- Al Kabir Town Lahore
- Golf View Residencia
- Overseas Block of Park View City Lahore
- IT Market in Orchard Mall Lahore
- IT HuB in Bahria Town Lahore – Jasmine Grand Mall
- SA Gardens Lahore
- Kings Town Lahore
- Citi Housing Multan Phase 1
- IT Hub in Jasmine Grand Mall Vs IT Market in Orchard Mall Lahore
- Wedding Galleria Jasmine Grand Mall
- Talha Block Commercials in Bahria Town Lahore
- Tauheed Heights Bahria Town Lahore
- Central Park Housing Scheme Lahore
Bahria Town Karachi is a benchmark within the landscape of Karachi with its world-class excellent-planned society. This society is sketched with an area concept to supply outstanding lifestyle facilities to its residents and can introduce new benchmarks of community development in Karachi. Below the list of some of the top Projects in Karachi:
- Bahria Town Karachi – Overview of Commercial Projects
- Precinct 32 in Bahria Town Karachi
- Precinct 15 in Bahria Town Karachi
- Villas in Bahria Town Karachi
- Bin Abdullah Trade Center in Bahria Town Karachi
- Square One Mall Bahria Town Karachi
- Commercial Projects of Bahria Town
- Athar Aman Castle Bahria Town Karachi
- Precinct 30 Bahria Town Karachi
- SQ 5th Avenue Karachi
- AQ Bazaar by Bahria Town Karachi
- P-10 Villas By Bahria Town Karachi
- SQ 09 Towers in Bahria Town Karachi
- SQ Cloth Market in Bahria Town Karachi
- SQ 29 Jinnah Avenue in Bahria Town Karachi
- Commercial Properties of Ali Block Precinct 12 Bahria Town Karachi
- Dominion Mall in Bahria Town Karachi
- Abul Qasim Mall and Residency
- Descon Towers Bahria Town Karachi
- Aliyan Regency Luxury Penthouse Bahria Town Karachi
- Precinct-11 A Villas By Bahria Town Karachi
- Bahria Farm Houses Karachi by Bahria Town Karachi
- Best Precincts for 125 Sq. Yards in Bahria Town Karachi
- Bahria Paradise Villas
- Bahria Golf City Karachi
- Sports City Villas Bahria Town Karachi
- Best Options of 250 Sq. Yd Properties in Bahria Town Karachi
- Central Park Apartments Bahria Town Karachi
- Liberty Commercial Bahria Town Karachi
- What are the Main Reasons of Increase in Prices in Bahria Town Karachi?
- SQ Cloth Market 2 in Bahria Town Karachi
- Precinct 25 Bahria Town Karachi
- Precinct 17 Bahria Town Karachi – Best Precinct for 500 sq. yard plots
We can see that the Pakistan Real Estate Forecast 2021 suggests investing more in this market as it promises a huge profit in the coming future. The investors should purchase the properties at a low rate so that they can earn more by selling it once the rates are good enough.
Related Cool Links:
- Bahria Town Lahore Revised Its Possession Charges And Utilities Charges
- Bahria Town Karachi Revised Its Possession Charges And Utilities Charges
- Budget Friendly Real Estate Investment Options in Lahore 2021
- Best Real Estate Investment Options in Karachi 2021
- 5 Mistakes Made by New Home Buyers and the Ways to Avoid it
- How to Avoid Fraudulent Activity While Buying Property in Pakistan Either on Cash or on Installments
- Real Estate Investment Opportunities in Pakistan 2021
- Installments or Full Payment?
- Pros and Cons of Plots on Installments
- A Guide to Transfer Procedure of Property in Bahria Town
- Possession Charges And Utilities Charges of Bahria Town Lahore
- Best Commercial Projects with Easy Installment Plan in Bahria Town Lahore
- Is This The Right Time To Invest In Property?
- Pakistan Real Estate Forecast 2021 – All You Need to Know