Under an amendment in the Finance Bill 2024–25, a major change has been made to the income tax clause, requiring an eligibility certificate from the FBR for the purchase of valuable property, vehicles, or other assets.
According to the amendment, individuals intending to purchase property or vehicles above a certain value will be required to register their details on the FBR website, after which an eligibility certificate will be issued. This condition is set to ensure that the buyer legally possesses the required financial resources.
However, under the amended law, an FBR certificate will not be mandatory for purchasing a vehicle worth up to Rs 7 million, a residential property worth up to Rs 50 million, and a commercial plot worth up to Rs 100 million. For purchases exceeding these limits, obtaining the certificate will be mandatory.
Under the same finance bill, the rate of withholding tax on property sales has also been significantly increased starting from July 1. According to the new amendment, the withholding tax rate for property sales worth up to Rs 50 million has been raised from 3% to 4.5%. Similarly, if the property value is between Rs 50 million and Rs 100 million, a 5% withholding tax will apply. For property sales exceeding Rs 100 million, the rate has been further increased to 5.5%. The government states that this step has been taken to improve financial discipline and expand the tax net, making the property buying and selling process more transparent.
On the other hand, a 1.5% reduction has been made in the withholding tax on property purchases to provide some relief to buyers.
These measures are part of the government’s efforts to ensure transparency in the tax system, proper asset registration, and verification of income sources.
