Property buying and selling tax to increase from July 1

An advance tax will be imposed on property buyers and sellers starting from July 1 which is expected to increase the cost of real estate transactions.

Islamabad: According to details, the government has approved new tax rates on real estate transactions under the Finance Bill. Under the new law, from July 1, the seller of a property will be required to pay an advance tax of 2.75% of the total transaction value.

On the other hand, the buyer will also be subject to an advance tax of 1.25% of the fair market value of the property which is expected to increase the overall cost of doing business in the real estate sector.

According to the Finance Bill, taxes have also been increased for the corporate sector and banks. From July 1, a 10% tax rate will be applied on income exceeding Rs. 150 million for banking companies and the fertilizer sector.

In addition, other corporate companies will be required to pay 8% tax on income exceeding Rs. 500 million. The government has also introduced significant amendments to the Income Tax Ordinance to bring digital income into the tax net.

Under the Finance Bill, from July 1, a 5% withholding tax will be imposed on all income earned from social media platforms (YouTube, Facebook, Instagram, TikTok, etc.) under Section 151B applicable to all local content creators.