Finance Bill 2024 Proposes Flat 15% Capital Gains Tax on New Property Sales

For individuals not listed on the ATL, the proposal introduces progressive tax rates on income, with a minimum tax of 15% on the capital gains from property sales.

ISLAMABAD – The Finance Bill 2024 has introduced a flat rate of 15% on capital gains from the disposal of immovable property acquired on or after July 1, 2024. This proposal marks a significant change in the capital gains tax (CGT) regime, which currently taxes such gains at varying rates up to 15%, depending on the holding period and the type of property (open plots, constructed properties, and flats).

A tax expert explained that under the existing system, immovable properties sold after a specified holding period are subject to a 0% tax. This unchanged rule will still apply to properties acquired before July 1, 2024. However, for properties acquired on or after this date, a uniform 15% tax rate will be imposed on gains, provided the seller is listed on the Active Taxpayers List (ATL) at the time of disposal.

For individuals not listed on the ATL, the proposal introduces progressive tax rates on income, with a minimum tax of 15% on the capital gains from property sales. Additionally, the same 15% flat rate will apply to capital gains from the disposal of securities acquired on or after July 1, 2024, for those on the ATL.

The tax expert highlighted that this move aims to streamline the tax structure, making it simpler and more uniform, while also encouraging more people to be listed on the ATL. For those not on the ATL, the capital gains will be taxed as normal income, ensuring a minimum tax rate of 15%.

This proposal, if enacted, will significantly impact real estate transactions in Pakistan, encouraging timely property acquisitions before the new tax regime takes effect.