Real estate business adjusts after new regulations

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KARACHI: Pakistan’s real estate sector seems to be experiencing a slowdown in activity as stakeholders are now getting used to new regulations and the tax regime. The rough patch comes after the government introduced various changes in a bid to increase its revenue and control the flow of illicit money into the sector, cornering speculators and non-filers of income tax returns.However, in a survey conducted byseveral real estate agents say there has been a major slowdown in business for several months, and it started even before the government restricted non-filers from buying property above Rs5 million. The PML-N government in its last budget barred non-filers from purchasing property at a declared value of over Rs5 million. The move came as a blow to speculators and even most genuine purchasers of property who happen to be non-filers. Real estate agents say the sector was experiencing a slowdown for months and the sanction only added to the woes. They argued that registration issues with the government have halted transactions in the sector.Business is down and we have only been able to strike small deals mostly for renting property,” said Mohammad Qamar, an estate agent.Another estate agent Waqas Ahmed said the slowdown was the result of issues at the government registry where the process had come to a halt.
Real estate agent Mohammad Kamran pointed out “it takes only Rs5,000 to change a non-filer’s status into a filer,” a service which his firm gives to potential buyers, who buy property through it. However, he was also of the same view that property business had dropped significantly in recent months. According to Association of Builders and Developers (ABAD) Chairman Arif Jeewa, there is a need for clarity on the 1% tax imposed at market value at the time of sale and purchase of property, which he believes will only be resolved after the new government comes to power and takes the decision.

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