FBR Unveils Measures to Curb Black Money in Real Estate Sector
In a recent meeting of the Senate Standing Committee on Finance Sub-Committee, chaired by Senator Mohsin Aziz, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial presented new measures aimed at addressing the flow of black money in Pakistan’s real estate sector.
Key Measures Announced
The FBR chairman outlined the government’s decision to stop the usage of undeclared income and assets in property transactions. One of the major steps announced was the ban on the purchase of property worth more than Rs10 million with undisclosed income.
Langrial emphasized that individuals would now be required to declare their income in income tax returns to facilitate high-value property purchases. The move is part of broader efforts to ensure transparency and curb illicit financial activities in the real estate sector.
Targeting High-Value Transactions
While 97% of property transactions in Pakistan are valued at less than Rs10 million, Langrial pointed out that the FBR is focusing on the remaining 2.5% of transactions involving high-value properties.
“Most of the undeclared money and wealth is funnelled into the real estate sector,” Langrial remarked, highlighting the need for stricter regulations to address this issue.
Read More: Government Announces Major Tax Cuts for Property Transactions
New Specialized App to Track Income
To enforce these measures, the FBR is developing a specialized app that will link declared income data with income tax returns. For example, an individual can purchase a plot worth Rs13 million if their income tax return reflects the required income. To purchase more expensive property, it will be mandatory for the individual to declare additional income.
This app will also allow children up to 25 years old to purchase property based on their father’s income tax return, but it will target those with undeclared income or those who do not file income tax returns.
Property Transaction Statistics
The FBR chairman shared some key statistics, revealing that 1.695 million property transactions took place in 2023-24, with 93.7% of these transactions valued at less than Rs5 million.
Langrial reiterated the importance of strengthening regulations to eliminate black money in the real estate sector and ensure greater transparency in high-value property dealings.
