Taxing real estate agents – Journal

Property tax is levied and collected under the Sindh Urban Real Estate Property Tax Act 1958 and Pakistan Finance Act 2017. According to these laws, a uniform rate of tax is levied on all categories of property. properties at the rate of 25% of the annual rental value. (ARV).

Taxes, such as capital gains tax (CGT), capital value tax (CVT), stamp duty, withholding tax (WHT) or withholding tax, must be paid by the buyer and the seller of the property, whether residential, industrial or commercial.

The buyer and seller of the property would also pay the registration fee and commission to the estate agent. It looks great because the state treasury receives a huge amount of taxes from both the seller and the buyer. However, in this whole process, one smart person – the real estate agent – clearly goes unnoticed and gets away with all the money, as he never pays a single penny to the government, evading millions of rupees in taxes, while receiving millions in commissions from both parties.

Relevant authorities should come up with appropriate legislation in this regard and put the real estate agent in the tax net for the betterment of the national economy.

Syed Sadaqat Hussain
Karachi

Posted in Dawn, August 25, 2022

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