ABAD Urges Equal Tax Rates for Overseas Non-Filers
The Pakistan Builders and Developers Association has urged the government to enable non-filing foreign Pakistanis to invest in the country’s real estate sector at the same tax rates as filers. According to ABAD, the move would assist revitalize a faltering property market, attract international remittances, and boost overall economic activity.
In an exclusive interview with Business Recorder, ABAD Chairman Hassan Bakshi hailed the government’s recent move to eliminate the Federal Excise Duty (FED) on property transactions, a tax that formerly varied between 3% and 7% of the transaction amount. However, he emphasized that this step alone would be insufficient to encourage major investment.
“The total tax burden on property transactions remains between 13% and 15% for filers, and an exorbitant 35% to 40% for non-filers,” Bakshi told reporters. “We need a comprehensive tax reform to make real estate investment financially feasible again.”
Bakshi highlighted the investment potential of Pakistanis living abroad, stating that many expatriates are turning to international markets such as Dubai, where property transactions are more transparent, policy frameworks are predictable, and taxes are capped at 4% regardless of tax filing status.
The ABAD has advocated that non-filing foreign Pakistanis be allowed to invest in real estate at the same tax rate as filers. Once a property is purchased, the Federal Board of Revenue (FBR) may require the filing of a National Tax Number (NTN). If the investor fails to comply, a grace period may be granted, following which automatic filer registration should be implemented.
“We have nearly ten million Pakistanis working abroad. Many of them want to invest in their home country but are discouraged by high taxes and bureaucratic red tape,” Bakshi said. “Making the process easier will directly benefit the economy.”
ABAD also urged the government to cut advance taxes under Sections 236C and 236K of the Income Tax Ordinance, which significantly inflate the cost of property transfers.
Furthermore, Bakshi proposed reallocating a portion of the Rs461 billion budget of the Benazir Kafalat Programme to create a subsidized housing loan scheme for first-time homebuyers.
He emphasized that real estate is linked to over 60 allied industries, and revitalizing the sector could potentially inject up to Rs2 trillion in tax revenue into the national economy.
The proposal has gained backing from other industry stakeholders, including the Pakistan Real Estate Investment Forum (PREIF), who highlighted the need for a consistent and investor-friendly policy framework to restore confidence in the market.
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