The real estate industry, which plays a key role in Pakistan's economic growth, has been facing complex difficulties over the past ten years. The fact is that the development of the real estate industry depends on these factors.
interest rate
Overseas Investment
Budget and taxes
Purchasing power
Interest Rate:
Rising and falling interest rates also affect the property market, along with key industries that support the country's economy. High interest rates stand in the way of the construction sector, which plays a key role in the country's development. Affects land, construction and building prices. On the other hand, lower interest rates benefit the banking industry, which in turn increases investment in various sectors. Most people in Pakistan invest in real estate. Imagine that the real estate industry benefits from a reduction in interest rates.
Overseas Investment:
Overseas investment is the backbone of the Pakistani economy, with overseas Pakistanis investing in real estate and buying new luxuries houses for sale in Pakistan ,helping to strengthen the industry economically. According to the current situation in Pakistan, due to the increase in the number of overseas property fraud cases, overseas Pakistanis are now reluctant to invest. Coordinated legislation is urgently needed for the rights of Pakistanis abroad so that the real estate sector is not further affected.
Budget, Taxes and Government Policies:
Government policies and budgets are also among the factors that affect the real estate industry effectively or ineffectively. Government policies designed to improve the real estate industry not only contribute to the development of the industry but also Overall, the wheel of the country's economy is proving to be fast. Talking about the current situation in Pakistan, economic friendly policies have been formulated to improve the real estate industry in 2020 and get the country out of the economic crisis. Budget 2020 has also provided relief to the real estate industry with some of the key points as follows:
Expenses incurred in buying and selling property have been reduced, the next buyer will have to pay only one per cent stamp duty instead of five per cent stamp duty.
No tax will be levied on first time property buyers and sellers
In the auctioned property, the buyer will be charged 5% advance tax instead of 10%
Sales tax on services applicable to real estate agents has been abolished
The property holding parade has been reduced from 8 years to four years, meaning that if you have been buying a plot or house for four years, you will not be charged a gain tax.
The first year will be taxed on the entire profit of the property. The second year will be taxed at 75%, the third year at 50% and the fourth year at 25%, while in the fifth year the tax will be zero.
Purchasing power:
According to the current situation in Pakistan, with the rise in property prices, the purchasing power of consumers has also increased. Due to increase in purchasing power, the trend of investment and purchase in the property market increases. The demand for housing schemes and commercial property in urban areas increases while the sale and purchase of agricultural property in rural areas increases.
