The government has finalized plans to establish the Real Estate Regulatory Authority to combat tax evasion and illegal transactions in the real estate sector. Under the new regulations, unregistered individuals conducting business could face fines ranging from Rs50,000 to Rs500,000, while real estate agents providing false information may be fined between Rs200,000 and Rs500,000. Wrongful property transfers could incur fines of up to Rs1 million, and failing to submit the required documents could result in fines from Rs50,000 to Rs200,000, with prison sentences of up to three years also on the table.
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This initiative is in response to demands from the International Monetary Fund (IMF) for measures to boost tax revenue. The IMF has been urging stricter regulations in the real estate sector as part of the ongoing discussions for the first review of Pakistan’s $7 billion loan program.
Policy-level talks between Pakistan and the IMF have commenced today and will continue for two weeks. Following these discussions, the IMF review mission is expected to submit its recommendations to the Executive Board. A final decision on releasing the next $1.1 billion tranche, along with potential measures on electricity pricing, is anticipated by the end of this month or early April.
