Dha News : We have Decided to Protest against New Property Taxes in front of ”Lahore Press Club ” who want to Join Us Plz Contact
Dha Lahore Faraz Ali 0321-4000646
ISLAM Estate (R)
Address: 19-K, Phase 1 Dha Lahore
042-111-111-624
For all investors and property dealersTax from tomorrow onwards
CGT is the tax that will topple the market. Not the Advance tax for increased DC rate nor the increase in registry etc. There are two opinions about this tax:
1. Govt has announced that it will be 10% of market value of property
2. Principally and logically it should be applicable to the profit proceeds on sale of property (cost of buying – sale price = profit)
However either ways, its a complete disaster.
For sale of a Kanal plot in DHA from Phase 1 to 8 which was bought and registered in last 5 years, with a current average market value of 2 Crore Rs, seller will be paying Capital Gain tax as below:
1. If 10% of market value then CGT levied alone on this plot is 20 lac Rs !!! So sell the plot of worth 2 crore and pay 20 lac as Capital Gain Tax !!!
2. A slightly lesser but equally devastating option would be to compute CGT on the actual gain (cost – profit basis) by below formula:
CGT = 10% of (MVP (Market Value of Plot) – DVP (Declared Value of plot at the time of purchase))
DVP (Declared Value of Plot declared at the time of property purchase in last 5 years) = DC Rate Value at the time of purchase = approx 70 Lac/Kanal (Average DC Rate for DHA Phase 1-5 for last 5 years)
So CGT would become = 10% of (MVP (2 Crore) – DVP (70 Lac))
= 13 lac Rs
Also remember that 1% advance tax will be added on top which will be 2 lac in this example. So total tax paid (including registry/transfer and stamp duty)= minimum 20 lac to 30 lac on a sale of every 1 kanal plot in DHA Phase 1-8 from tomorrow onwards