How To Pay Your Property Tax In 2021?

How To Pay Your Property Tax In 2021

Do you want to be a good citizen who wants to contribute to the country? The first step you can do is to pay tax as tax-paying reduces the burden of the economy. Pakistan has been in circular debt of the IMF for the last few years. The country won’t come out of it until the citizens do their part. If they pay tax, we maintain the circulation of wealth and help the government spend money on hospitals, education, and development by collecting tax.

If you want to understand the tax system, you are in the right place to know the terms and conditions. The first question arises here: how do you pay your property tax in 2021 in Pakistan?

How to pay your Property Tax in Pakistan?

To go through the process and make things easier, make some points clear first.

Why invest in Property?

To invest in a property is the assurance of your financial stability. It would be best if you did not let your money be wasted. Every investment has its pros and cons. Real estate companies like Ovaisco Builders and Developers, with their numerous real estate investment projects, help you make the future secure. Paying tax is the first and foremost duty of all while buying or selling a property.

Property tax

Property tax is not only about owning a home or plot; it is about any assets that you own: farms, cars, or office buildings. You are answerable to the government about this buying and selling for welfare.

Types of Property Tax in Pakistan

Different types of property tax are designed to understand the tax collection system, which we will define to clear your concepts.

Types of tax Rates in Pakistan
Capital value tax (CVT) The rate at which CVT is charged is 2% of recorded value.
Capital gain tax (CGT) It is only charged for the first three years of selling a property.
Withholding tax (WTH) The rate is 12.5% for a filer person and 20% for a non-filer of tax return.

It varies according to the property you own. Different categories of properties have an additional amount of tax applied to them. To understand, we will look into types of Taxes in Pakistan.

What is Capital Value Tax?

This is one of the categories of types of property tax in Pakistan in which you pay a tax after purchasing a property. Tax on a property purchase in Pakistan is 2% of the recorded value.

What is Capital gain tax?

The seller of the property pays this tax. Tax on the sale of property in Pakistan is levied for the first three years, and it reduces with time. You have to pay 10% for the first year, 7.5% for the second year, and only 5% for the last year.

What is a Withholding tax?

This is the amount of tax that both buyers and sellers have to pay after selling the property. There are different rates for filers and non-filers.

What is your status?

A Tax Filer is a person who is registered in the list of Taxpayers that FBR issues. To check your status, whether you are a filer or not- type ALT and your CNIC and send it to 9966.

You can follow this whole procedure to solve the problem of how to pay property tax in Pakistan.

According to the report of 2020, withholding tax on a property purchase in Pakistan is 2% for filers and 45% for non-filers. Withholding tax on the sale of the property is 1% for filers and 25% for non-filers.

There are several consequences for not paying your property tax in Pakistan. If you want to get ahead of these consequences, you should follow these steps.

How to apply for Property Tax Records?

These are the things you will need to apply:

Application from an enlisted proprietor of the property
CNIC of the candidate
Evidence of instalment of Property Tax

Time for tax payment?

You can pay your tax before the 30th of September with a rebate of 5% of tax. The deadline can be 30 days after the notice. A rebate is an amount that is refunded to a person who gives their tax on time. On the other hand, if you pay your tax late, you have to pay a surcharge which is an additional amount imposed on you.

So, if you have not paid your taxes yet, go to the following institutes where you can easily lower down your burden and find an answer of how to pay property tax in Pakistan:

Department of tax collection:

You can pay your tax before the 30th of September with a rebate of 5% of tax. The deadline can be 30 days after the notice. A rebate is an amount that is refunded to a person who gives their tax on time. On the other hand, if you pay your tax late, you have to pay a surcharge which is an additional amount imposed on you.

Go to the bank:

You can make an online challan of property through banks and submit your tax.

They also have an online banking system. Technology has easy paths, and one can get help from the online banking system while staying home.

Calculate your tax yourself:

The government of Pakistan has provided a website where you can calculate your tax by simply sitting at home. Use this tax calculator. for tax calculations

Property tax in Pakistan 2021:

According to the Finance Act 2020, the holding period and CTG (contingent) are reduced on immovable property disposal. The longer holding period means that property was not bought to make a sudden profit. So, the government has introduced some tax flexibility.

If the holding period is less than one year, then 100% of CGT is taxed.
If it is more than a year, capital gains to be taxed would be 75%.
If the period is more than four years, no CTG is applied.

Updates about CGT:

It was reduced by half after the Finance Act.
If the gain is less than 5 million, the tax value would be 2.5%. It was 5% before the act.
If the gains are more than 15 million, the tax value would be 10% which was 20% before the act.

So, it would help if you didn’t wait to avail yourself of the profit by selling or buying a property after this amendment. If you want to sell a property or buy one, pay your tax in due time to be a responsible citizen.

You can also visit real estate companies giving thorough knowledge and guidelines about the safe property and tax values.

For more information, go to Elaan Marketing and move towards a life of honor.

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