Effects of Tax Amnesty Package 2018 Real Estate Pakistan

Effects of Tax Amnesty Package 2018 Real Estate Pakistan

Effects of Tax Amnesty Package 2018 Real Estate Pakistan

Federal Govt of Pakistan recently announced a tax reform package and amnesty which is expected to overhaul and change the entire taxation system in Pakistan. Today we will be discussing the Effects of Tax Amnesty Package 2018 Real Estate Pakistan in detail and how it may effect property sector in Pakistan.

The tax package revolves around five major points as under:

  1. CNIC numbers to be made NTN numbers to monitor tax compliance of all citizens.
  2. Income tax brackets and percentages to be revised. Complete tax exemption on annual income up to Rs1.2m; maximum percentage of 15pc to be levied on income above Rs4.8m per annum.
  3. Undeclared assets held locally or abroad to be declared after payment of nominal penalties. Those who avail scheme to be granted one-time exemption from accountability laws.
  4. Tax to be collected on all property transactions to be made uniform (1 % federal and 1 % provincial tax) . Govt to have the right to purchase any property by paying 100pc over and above its declared value within six months of its registration.
  5. Government to monitor citizens’ financial records and issue notices if they find evidence of tax evasion. Penalties to be decided in parliament.

I will only be focusing on its implementation in real estate sector including short term and long term affect if the tax package is implemented in true letter and spirit.

In my personal opinion it is a very positive and bold step taken by the Govt and will have outstanding results in the future. Usually everyone holding black money will either keep it in cash or will get it white by using the usual Telegraphic transfer procedure by paying 3 to 5 % on the said amount. The Govt reduced the penalty to only 5% thus encouraging all who have undeclared money to become part of Tax net. So lets assume you have 20 crores undeclared assets, you can simply pay 1 crores and declare all your money to the Govt for future transactions and not only you become a filer but you also never have to worry about your undeclared money anymore.

Another thing which some may do is to get 50% of your amount white through amnesty and purchase properties with 100% of your money before July 2018 declaring only 50% of values and giving taxes as per present FBR and DC Values. You are safe as the Govt can not acquire your property unless it pays you 100% of its value plus you save the 5% penalty on 50% of your undeclared amount. However i must warn you that this will be an illegal practice and you may end up paying much more CGT if you sell your property before 3 years. 

This is a golden opportunity and if you do not avail it than you will be at loss in future. So i do recommend that if you have undeclared assets this may be the right time to declare it. Most importantly this scheme is not applicable to people holding public service offices, there spouses and dependent children. Therefore it is basically meant to bring the culture of taxation among general citizens, businessmen and industrialists.

When it comes to real estate sector directly the most important clause is abolishing of FBR and DC values and concluding of taxes on transactions as per actual values as under:

  • 1% Advance Income tax on all property transactions.
  • Advance tax to be adjusted in income tax liability.
  • Federal govt to recommend maximum 1% local, provincial taxes.
  • Govt can buy property by paying 100% above declared value.

Our readers must understand that the 1% advanced income tax is not a tax on real estate and therefore adjustable in your tax returns. Those who are not clear of taxation system start considering this as a tax on real estate sector but this is not the case, let us consider a scenario as under :

Lets say you purchase a 1 Kanal plot in DHA Lahore Phase 8 for 2 crore rupees and as you have all assets declared after using the amnesty as per this package, you will be paying only following as tax:

1% of total value of plot as advance adjustable income tax = 2 Lacs 

1% of total value of plot as provincial tax = 2 Lacs 

Where as presently you are paying the taxes as under 

Advance adjustable income tax = 126000

Provincial tax or other non adjustable taxes = 293000

This means that clearly you are saving following with the new system:

19000 in over all taxes.

93000 in fixed nonadjustable taxes.


However there may be many variations of this example depending on where and what you are buying. Commercial investments where people used to get away with very low taxes in certain cases may not be that lucrative in terms of tax savings unless some one does under pricing. On the other hand plots in 9 Prism which are roughly around 10 Million price bracket may save you a couple of lacs in taxes.

Watch Complete Lecture 

Short Term Effects

  • I believe a lot of people will like to take advantage of this scheme, thus Govt will raise billions of rupees of tax in terms of 5% penalty.
  • The money declared may not be used in real sector, however real estate sector may yet provide a safe heaven if some one does not want to declare 100% amounts and save 5% penalty doing transactions on FBR values before July 2018.
  • In general i see number of transactions rising before July 2018 as more people who are scared of a change will most likely prefer to enter into real estate before they take effect.
  • I do not see prices jumping very high except a few millions on this wave though as the over all market is slow.

Long Term Effects

  • These modern tax reforms will reflect positively on the real estate sector growth in long term as people will be very clear on the taxes they have to pay thus avoiding complicated process they go through these days.
  • Eventually as your CNIC will be your NTN, everyone will have to pay taxes if it is implemented 100% .
  • If there are still people who will prefer to remain non tax filers the only option they will be left with is to trade in properties below 4 Million and let me assure you that there are plenty of them around. This may spark demand in files such as present in DHA Gujranwala, Multan, Lahore and small plots.


In my opinion this is a great tax reform package, it is modern and implementable . If we all love our country we must take this as a positive step and encourage people to become part of tax net. The govt has understood the plight of the people and has raised slab of income tax to 1.2 Million. In addition the rate of income tax is also very reasonable for high earners above 4.8 Million.

I also believe that change some times can be scary and if people are not educated properly it can adversely effect the real estate sector. However areas such as DHA Lahore are safe because as per my personal experience 90% of people are usually tax filers and therefore will  greatly benefit by the new tax amnesty and reform package in Pakistan.

Overall i believe that this Tax Amnesty Package 2018 Real Estate Pakistan is generally a win win for real estate in short term and long term scenarios. The taxes will go lower in most of the cases and investors will feel more comfortable dealing with a simple and systemic taxation system.

One counter argument that real estate will not offer a tax heaven any more and therefore we may see lesser interest by some investors is baseless in my opinion. I believe that the real estate sector still offers a lot of opportunities for smart investors to safeguard their interests while using this package to their advantage.



Captain (Retd) Shahnawaz Yaqub Bhatti

CEO Imlaak

Mob : +92 333 1717170 ( Whatsapp)

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Hi, I am overseas Pakistani and having immature property in Pakistan means few of the project I booked units and it is under development, my payments are not been completed. I paid heavy taxes on my salary when I was in Pakistan till last year but I didn’t file this so I am non filer and unfortunately I was busy and unable to take advantage of this Amnesty scheme. what should I do now? I will be thank ful to you, if anyone can give me advise. thanks


I purchased one kanal plot in central park in Oct 2017, I paid tax at the time of buying, I don’t remember percentage. Now where I have to declare it ? in amnesty domestic assets, income tax return or some other ? Please note that I am living out of Pakistan since 2011, I am non resident. I have to pay tax again in amnesty ?

Hasan Ansari

Is it true that the tax will be deduct on your actual property cost on property registry?


good job govt,,,,,,,Black money will stop in the market……middle class can buy easily……DHA plot will reduce to 50%……all black money involved especially in karachi …..well done govt…..be stick on those parameters which setted for coming fiscal years……


what is the rate of immovable property for provincial and fbr purposes wef from 01-07-2018


If I living in pakistan has purchased a plot for rupees 5 million 4 years back and todays current market price of that plot is rupees 10 million than for availing amnesty and declaring in my wealt starement I have to pay 5% on purchase price that is 5 million or today’s current market price 10 million.

Sameer Sikander

when amnesty expires, date pleass??

Sameer Sikander

when will this amnesty date expires. mean last date??


What if I have a personal living house of 2 million.
1.should i have to pay tax?
2. Should i have to declare its total price or 50%.


I worked abroad for 8 years. 3.5 years back when I came back to Pakistan, I bought a 1 Kanal plot as a non filer. Paid FBR tax as non filer at the time of purchase of the plot. Now from last 3.5 years I am jobless and my & my family’s expenses are borne by my brothers residing abroad. Do I still need to file yearly income tax return and do I still need to be filer?

irfan khaliq

As far as I have read the bill, it doesn’t speak about non filer can purchase property below 4 million
As the bill states below:
“any application or request by a person from
any authority responsible for registering,
recording or attesting transfer of any
immovable property for registering or attesting
the transfer shall not be accepted or processed
by such authority, unless the person is a filer.”

By this a non filer can not purchase property.
Even new bill also restricts non filer to get register new or imported car.


i had purchase a plot in Gulshan e roomi, Malir Cant, Karachi on 2010 for 12,20,000 now i have sale it for 6,200,000. I have declare this with amount as 1,220,000 in return file (in year 2015 return). How much i have to pay CGT. Although i have purchase before Jul 2016 & not sale before 3 yrs but i mention this as asset in my first return file in 2015, will this make any outage ??

Syed Zia Hussain

Now I am very much clear about new taxation and amnesty . People should avail this chance to contnue their Real Estate business in a right manners without any fear.

Muhammad Faisal

what effect would be on seller, any more gain tax?


Aoa plz ap dha rehbar main ajkal plots 10 marla or 1 kanal Ka kia rate he bata dy

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