یو بینک ہوم لون - گورنمنٹ مارک اپ سبسڈی اسکیم

Real estate agents in Lahore are staging a protest today against the new tax regime. Agents from all parts of the city have planned to reach the Assembly Hall in form of rallies and register their concerns against the new tax mechanism, which has reportedly brought down the real estate transaction volume by 80%. In today’s protest, real estate agents from Karachi, Islamabad, and Peshawar will also show up, illuminating the fact that the new taxes affect them all in a similar manner.

After conversing with numerous people from the industry, I have learnt that property agents and consultants from all over Pakistan are on a single page about these taxes and consider them unjustified. Today, the agents have taken their coordination one step ahead after collaborating for similar rallies and sit-ins that were held quite recently in other cities. One such protest was held on October 16, 2016 in Karachi. Today’s protest in Lahore is part of these collective efforts, and agents plan to get together in Islamabad on October 27, 2016.

The effects of drop in real estate transaction volume are being felt far and wide across the country and in the coming few weeks, we would be able to have a clear understanding of how industries related to the real estate sector are being affected. In DHA Lahore alone, many real estate agencies have closed their offices as bearing the rent and related expenses in the absence of any business activity is no longer possible for them. Lahore Development Authority (LDA), too, faced a loss of PKR 130 million in one month after the new tax regime was implemented, making it hard for the authority to manage its expenses.

The basic philosophy behind increasing the tax percentage was to track untaxed money that has apparently made the real estate commodities fall out of the reach of common buyer. The Federal Board of Revenue (FBR) obviously intended to bring this money under the tax net.

Well, it has certainly discouraged property flipping by making property investors wary of the new taxes, property rates have also gone down in almost all major housing societies across the country, but this has unfortunately failed to convince genuine property buyers to step forward and make use of the dropped real estate rates and help shorten the housing shortfall in the country.

Today, almost 3 months after the implementation of the new tax regime, the revenue collected from property trade and transfer is about 80% lower than that collected before July 1, 2016. Many real estate brokers, who get their commission from property buyers and sellers, have been almost idle for the last 3 months. They have now decided to start protesting against the new taxes and use their collective influence to make the government restore the old tax regime or bring the rates mentioned in FBR valuation tables down.

Looking at how the situation has changed for these agents, who solely depend on real estate transactions to earn their livelihood, I suspect that their protests can gain momentum. Considering the present political scenario, I hope the authorities concerned don’t deem such agitation buildup as a good sign, especially from influential folks from the real estate industry.

From ZemTV