Important pointers for real estate industry in Budget 2020-21
Islamabad: The federal government has announced the Budget 2020-21 on Friday and as the details of the budget start pouring in, the relief measures for the real estate and construction industry have also been revealed.
The government has time and time again mentioned the aim to increase revenues and provide jobs to daily wagers and labourers specially during the pandemic. Some of the relief measures included in the budget for the coming fiscal year have been included here.
Reduction in Capital Gains Tax
The government had proposed the removal of the bifurcation concept of the holding period for plots and constructed properties for the collection of Capital Gains Tax (CGT). The holding period has now been reduced to 4 years and the CGT ratio on disposal of property is also being reduced.
According to the proposal, the CGT on immovable property sold within 2 years of its purchase would carry 75% CGT, 50% when sold within 3 years, 25% when sold within 4 years, and 0% when sold after four years of the initial purchase.
Tax Relief on Construction Material
The Federal Excise Duty on cement has also been reduced to PKR 1.75 per kilo that was previously held at PKR 2 per kilo. The price of the cement bag is also expected to be reduced by as much as PKR 25. Moreover, the government is also reducing the regulatory duty on steel and iron coils.