Lamudi director says reduction in taxes will give boost to housing and construction sector and create more employment opportunities
The recently announced federal budget has brought a positive sign for real estate sector as relief measures for developers and builders and reduction in taxes would give a boost to this multi-billion dollar industry.
The construction sector creates a positive ripple effect on 16 other industries of Pakistan and the government has taken certain measures to provide incentive packages for it. Firstly, the mark-up on housing loans obtained by individuals for construction or buying of a house can now be deducted up to 50% of the taxable income.
Secondly, the minimum tax has been suspended on builders for construction and sale of residential buildings. The supply of bricks and crushed stone would also be exempted from sales tax for up to three years till June 30, 2018. The customs duty on import of construction machinery has also been reduced to 10%.
Moreover, the government has also taken measures to promote development of Real Estate Investment Trusts (REIT) in the country as capital gains of any person who sells a property to a REIT development scheme would be exempted from income tax till June 2018. Similarly, if a REIT scheme for development of housing sector is set up by June 2018, the rate of income tax chargeable on dividend income would be reduced by 50% for first three years.
Lamudi Pakistan Country Director Saad Arshed, in a press release on Thursday, said the relief measures provided by the government would indeed have a positive impact on real estate industry of Pakistan.
“All these reduction in taxes and import duties would give a boost to housing and construction sector of Pakistan and help in mitigating its housing backlog, he said.
With reduction in petroleum prices last year, there was a decrease in transportation costs of housing materials for construction. With these further deductions in taxes, it will further reduce housing construction costs and will have a positive overall impact on real estate industry,” he added.
Arshed praised the government for taking positive measures to revive real estate activity as builders and construction industry would benefit manifolds by all these incentives. He said all this would create more employment opportunities and have a positive impact on its further 16 allied industries too.APP