ByTax experts have raised concerns over the newly introduced eligibility criteria for property transactions, which require individuals and companies to meet specific conditions before purchasing immovable properties. These rules, established by the government, have sparked debate among tax practitioners regarding their practicality and potential implications.
Under the new regulations, eligibility hinges on two primary conditions. First, individuals or entities must have filed their income tax return for the preceding tax year. Second, they must possess “sufficient resources” to cover the transaction, defined as at least 130% of the cash and cash equivalent assets declared in their wealth statement for the previous tax year.
For example, tax expert Ashfaq Tola explained that to purchase a property in Tax Year 2025, an individual must have filed their income tax return for Tax Year 2024 and must demonstrate sufficient financial resources to complete the transaction. Failing to meet either of these conditions would render a person ineligible.
Shahid Hussain, another prominent tax consultant, provided a detailed illustration of the criteria’s implications. Suppose Mr. A, a filer for Tax Year 2024, declared PKR 100 in his wealth statement. If Mr. A seeks to purchase a property valued at PKR 500, his resources would fall short of the required threshold, despite his filing status. Consequently, Mr. A would be classified as ineligible under the new rules.
Tax practitioners have noted that these measures aim to promote financial transparency and ensure that individuals and companies undertaking property transactions have the means to do so. However, they also expressed concerns about the potential challenges taxpayers may face in meeting these criteria. The experts emphasized the importance of reviewing one’s financial position, including tax returns and wealth statements, to comply with the new requirements before entering into property transactions.
Critics argue that while the policy is designed to curb tax evasion and streamline property transactions, it may inadvertently discourage investment in the real estate sector. Taxpayers are advised to seek professional guidance to navigate the new criteria and ensure compliance with the updated regulations.
