FBR is collecting property investment details, 2014-17
FBR, Federal Board of Revenue has started to collect the information about the investments in Pakistan real estate sector from 2014 to 2017. FBR had instructed all related departments including the provincial revenue departments to provide the details of all taxes including the Capital Value Tax, CVT. FBR will also collect the information about the investors who have invested in reality sector during 2014-17. FBR will also prepare a data base about the taxes related to Real Estate Sector. As FBR is collecting property investment details, let’s see its impact on reality sector.
Purpose of collecting data about reality sector investments
Real estate sector is notorious for parking the ill-gotten or black money. Many people invest in reality sector to whiten the black money. Pakistan has shadow economy which as per many experts is greater than the real economy. The government just wants to bring the shadow economy into tax net. Greater part of shadow economy is based on the reality sector. FBR is now regulating the reality sector by getting the information about all tax collection and also the details of the investors. ASSETS BEYOND MEANS is the real issue at the moment.
Impact on real estate sector
Ironically, Pakistan reality sector is alcoholic of black money. The huge influx of black money into reality sector has abnormally increased the property prices. High property prices are the main cause of declining home ownership in Pakistan. But prices are already falling due to Panama Case Decision and recent actions of FBR will further discourage the black money investment in Pakistan reality sector. Without investments, property prices will fall as low investment is low price. This is the good news for honest tax payers as they will buy the properties at much affordable rates.