A Task Force for Development of Housing Sector has recommended to Prime Minister Shehbaz Sharif waiving wealth reconciliation up to Rs. 50 million for investments in the real estate and construction sector.
Formed in December 2024, the 11-member task force was directed to develop and comprehensive framework for the growth and development of the housing sector. In its report, the take force has recommended exempting transaction taxes for various categories, including low-cost housing, government plots, and first-time home buyers.
Similarly, it has recommended revising property valuations every three years to reflect market prices.
As part of measures to facilitate access to housing, the task force has proposed reducing taxes on sellers from 3-4% to 1.5-2%. Similarly, it has proposed reducing taxes on buyers to 0.5% within three months. It has also proposed abolishing 3% federal excise duty, reducing provincial stamp duty from 4% to 2%.
Further, the Task Force has recommended a waiver of sub section 2A of 236C pertaining to 7E declaration and approval by commissioner, provide basic exemptions for properties valued at up to Rs. 10 million, shifting non-resident verification to an online system via NADRA and uniform rate for filers and late filers to remove disparities.
The Task Force has further recommended abolishing section 7 E of the Income Tax Ordinance; standardizing and rationalizing stamp tax rates across provinces and the federal capital, abolishing CVT in Islamabad and ensuring uniform taxation policies through the National Tax Council and waiver of wealth reconciliation for investment in real estate and construction sector up to Rs. 50 million.
Macro-economically, the take force has called for reducing the key policy rate to single digits, resuming the Mera Pakistan Mera Ghari scheme to restore developer confidence; and reintroducing mark-up subsidies for low-cost housing loan. It has also suggested launching awareness campaigns and financial literacy programs to educate consumers; collaborating with real estate developers to offer mortgage financing options and implementing low/fixed-term loans for periods of 5-20 years.
Additional short-term recommendations of the Task Force include ensuring all building and housing scheme approvals are online and time bound; introducing policies for vertical growth through tax incentives; green building initiatives; and solarization. It has also proposed relaxing building regulations and floor area ratios to facilitate vertical development; establishing High Density Zones for residential buildings; growth framework for the housing sector; and introduction of zone compliance system to replace traditional NOCs.
It has called for defining housing for low- and middle-income groups in monetary terms, ranging between Rs. 50,000 to Rs. 200,000, for targeted implementation; and participation of private sector through PPP and joint venture modes for low cost and affordable housing.
Prior to implementing these proposals, the government will secure approval of the International Monetary Fund (IMF) to ensure there are no hindrances to the ongoing $7 billion Extended Fund Facility.