ISLAMABAD : August 4,2023: The compliance or Section 7E of the Income Tax Ordinance 2001 has brought the transfer of properties across Pakistan to a standstill. The representatives of Realtors of Pakistan have rejected Section 7E in toto and demanded of the authorities to withdraw it and impose a workable tax on the real estate sector. A couple of weeks ago, the realtors of Pakistan have held a protest in Islamabad against imposition of Section 7 E on immovable properties in Pakistan.
The representatives of Realtors of Pakistan pressed for their demand of withdrawal of Section 7 E in a meeting of the standing committee of the national assembly. They informed to the committee that imposition of Section 7bE has created confusion leaving the business of real estate sector in total disarray. The representatives of the realtors told the committee that imposition of Section 7E has brought transfer of properties across Pakistan to a standstill as real estate sector does not treat this section fair
Section 7E was introduced through the Finance Act 2022, treating every resident person’s income as 5% of the fair market value of the capital asset situated in Pakistan, with exclusions provided in the law. This deemed income is taxed at a rate of 20% (effectively 1% of the fair market value of immovable property. In the Finance Act 2023, a new sub-section (2A) in section 236C of the Ordinance prevents the transferring authority from registering, recording, or attesting the transfer of any immovable property unless the seller or transferor has fulfilled their tax liability under section 7E and provided evidence of such compliance to the transferring authority in the prescribed manner.In the Finance Act 2023, a new sub-section (2A) in section 236C of the Ordinance prevents the transferring authority from registering, recording, or attesting the transfer of any immovable property unless the seller or transferor has fulfilled their tax liability under section 7E and provided evidence of such compliance to the transferring authority in the prescribed manner.
