The Senate Standing Committee on Finance Sub-Committee, chaired by Senator Mohsin Aziz, held a meeting on Monday where Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial presented measures aimed at curbing the flow of black money in the real estate sector.
The FBR chairman told the committee that the government had decided to stop the usage of undeclared income and assets. A major decision was announced to ban the purchase of property worth more than Rs10 million with undisclosed income. He stated that individuals will now be required to declare their income in income tax returns to make high-value property transactions.
Langrial emphasized that over 97% of property transactions in Pakistan are valued at less than Rs10 million, adding that the board is targeting only the 2.5% segment that engages in high-value real estate deals.
“Most of the undeclared money and wealth is funnelled into the real estate sector,” he stated.
To enforce this measure, the FBR is developing a specialised app that will display declared income data tied to income tax returns for purchasing property. For example, an individual can purchase one plot worth Rs13 million based on declared income. To buy more expensive property, it will be mandatory to declare additional income in the tax return.
The app will also allow children up to 25 years of age to purchase property based on their father’s income tax return. However, individuals with undeclared income or those who do not file income tax returns will be targeted.
During the briefing, it was revealed that more than 1.695 million property transactions took place in 2023-24, with 93.7% of these valued at less than Rs5 million. Langrial reiterated the need for stricter regulations to eliminate black money in the real estate sector and ensure transparency in high-value transactions.
