Pakistan, the government has announced an incentive package for builders and contractors under the Naya Pakistan housing authority. It is all about to promote the construction industry across the country.

The FBR spokesman tweeted a thread that includes some of the key features of the package and incentives for builders and developers.
In April, the Prime Minister announced an amnesty program for real estate that would allow people to invest their black money in the construction industry without disclosing the source of income.

Speaking to a medium after the National Coordinating Committee meeting last week, the Prime Minister said that the incentives should be used in full before 31 December 2020, as there would be no exemptions based on international obligations such as the FATF afterwards.

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Fixed tax system for builders and developers

• The tax is calculated on the basis of square meters / yard and is paid in quarterly installments.
• New projects and existing incomplete projects may choose the program until December 31, 2020.
• Existing incomplete projects must indicate the percentage of completion of the project at the appropriate time.
• Projects must be completed by September 30, 2022.
• Exemption from withholding tax on the purchase of building materials with the exception of cement and steel.
• Exemption from withholding tax when purchasing construction-related services other than companies.
• Permission to include ten times the fixed income tax paid in the accounts.
• Reduction of fixed tax liability for apartments at low prices by 90%.
• Dividends paid by builders or contractors are not taxable and there is no withholding tax on payment of these dividends.

Exemption on investment in new projects

Capital investments (money / land) made by a company / AOP in a new project are not checked for their source if the following conditions are met:

• A one-time business or AOP is registered between April 17, 2020 and December 31, 2020.
• Money will be until December 31, 2020 orThe ownership of the partner / shareholder will be transferred to the company / AOP no later than December 31, 2020.
• The invested money or land is used for the project.The project was completed on September 30, 2022.
• The customer's gray structure has been completed (roof laid according to plan).For the developer, the installation is complete and all roads have been laid on the ground.
• At least 50% of the land has been sold and at least 40% of the sales receipts have been received.

Exemption for the purchase of a home

The property will be purchased on December 31, 2020 (full payment will be made via the bank channel no later than December 31, 2020).
Construction of such a property will begin before December 31, 2020 and will be completed by September 30, 2022.

The purchase is made through a registered project and the buyer is the first buyer of the building.The purchase was made before September 30, 2022 (full payment will be made through the bank channel).

Not Applicable On

Officials,Public companies, REIT and companies whose income is exempt,Proceeds from crime.
There is also a one-time tax exemption for capital gains on the sale of private homes up to 500 m² in a house or 4000 m² in an apartment.

In addition, the construction industry has obtained the status of an industrial company for the import of machines and systems.

For further information you can visit the FBR page or following tweet thread

7.Advance tax on auction of immoveable property reduced from 10% to 5%.
8.CVT on immoveable property and shares has been withdrawn in ICT.(19/19)

— FBR (@FBRSpokesperson) July 12, 2020