Relief for Real Estate Sector as NA Committee Defers New Law

Islamabad, (February 12, 2025) – The National Assembly Standing Committee on Finance has postponed the approval of the proposed Tax Laws Amendment Bill, which sought to make the upfront disclosure of money sources mandatory for property purchases. This decision provides immediate relief to the real estate sector, allowing transactions to continue without the requirement of disclosing financial sources beforehand.

The committee’s decision followed the recommendation of a sub-committee, which suggested delaying the implementation of the new Section 114C until the Federal Board of Revenue (FBR) finalizes the necessary technological upgrades in its systems.

The proposed amendment aimed to curb economic transactions by individuals who do not have sufficient declared resources. However, concerns were raised regarding the FBR’s ability to verify transactions post-purchase, with a success rate of only 3%.

Committee members, including PPP’s Nafeesa Shah, criticized the amendment, warning that restricting economic transactions could negatively impact the economy. The committee also proposed exemptions for lower- and middle-income groups and first-time property buyers, with the federal government determining exemption thresholds.

Additionally, amendments were made to redefine “dependent children” instead of using the terms “son” and “daughter” and to expand the definition of cash-equivalent assets. The new proposal also allows barter transactions and the use of capital assets for property purchases.

The committee’s decision effectively excludes 95% of people from the bill’s purview, raising concerns about Pakistan’s ability to ensure financial documentation.

Source: The Express Tribune