New Property Tax Rates for Filers and Non-Filers 2024-25

The recently announced Finance Act 2024 introduces changes to property transaction taxes. This article clarifies the new tax rates for both buying and selling immovable property (land, buildings, etc.), with a clear comparison for filers (those who submit tax returns) and non-filers.

Understanding Filers and Non-Filers:

  • Filers: Individuals who have registered with the Federal Board of Revenue (FBR) and submit their tax returns.
  • Non-Filers: Individuals who haven’t registered with the FBR or submitted tax returns.

Tax on Buying Property (Section 236K):

This tax is deducted at source by the buyer and deposited with the government. Here’s a table summarizing the rates:

Property Purchase Consideration (Rs. Million)Tax Rate (Filers)Tax Rate (Non-Filers)Tax Rate for
Late Filers
Up to 503%12%6%
Over 50 but not exceeding 1003.5%16%7%
Over 1004%20%8%

Tax on Selling Property (Section 236C):

This tax is collected at source from the seller and deposited with the government. Here’s a table highlighting the key differences:

Property Sale Consideration (Rs. Million)Tax Rate (Filers)Tax Rate (Non-Filers)Tax Rate for Non-Filing Filers (Late Filers)
Up to 503%10%6%
Over 50 but not exceeding 1003.5%10%7%
Over 1004%10%8%

Important Update: The tax rates of Late Filers are applicable from July01, 2024. So any taxpayer who filed Tax Return after 31st October, 2023 is a Late Filer Now

The concept of immediate Active Tax Filer is no more.

Key Takeaways:

  • Filers maintain the same tax rates for buying property compared to the previous year.
  • Non-filers face a significant tax hike for both buying and selling property.
  • There’s a substantial penalty for filers who haven’t filed their returns by the due date when selling property (increased tax rates of 6%, 7%, and 8% based on consideration value).

Benefits of Being a Filer:

  • Lower tax rates compared to non-filers for property transactions.
  • Access to various benefits and opportunities offered by the government.

Also Read: New Duty Taxes Imposed on Property Transactions

Understanding these new tax rates is crucial for informed decision-making when buying or selling property in Pakistan. It incentivizes timely filing of tax returns to avoid penalties. Consulting with a tax advisor is recommended for specific guidance based on your individual circumstances.

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