This article will give you an overview of top highlights of Pakistan budget 2021 related to the real estate industry and the consequence that are expected from the new budget, whether they are going to have a positive impact on the real estate sector or not.
The Government of Pakistan releases the federal budget for every fiscal year. The current year budget starts from 1st July 2020 and ends on 30th June 2021. The budget is also being referred as the Corona budget as it has been presented in the time of the pandemic situation where the Federal Government has many challanges.
Overall Budget Details
Even with the whole Covid situation, the upcoming budget has been raised in value to support growth in the country. The size of the budget is Rs.7136 US $45 billion. A 4.8 percent GDP growth rate has beenset which is higher than the previously set3.9% GDP growth rate.No new taxes were introduced due to the corona crises whereas a new category for budget allocation was laid down to prevent coronavirus(vaccines etc).
Budget highlights for Real Estate
The construction sector and all related industries have been given the way to development as the government has cut down on taxes in this field and allocated funds to help the growth of this sector.The perspective for this is that it will aid the economic growth of the country by providing many sources of jobs for the citizens. As a result of this the construction sector will have a greater contribution to the nation as they will have a direct link on the economic growth rate in Pakistan. Also the cost of CEMENT FED has been reduced from PR 2 to PKR 1.75 kilogram in an attempt to lower the cost of construction and encourage people to invest in this business and utilize the properties.
The PTI government under Prime Minister Imran Khan has also presented 30 billion worth of subsidies for the Naya Pakistan Housing Scheme which aims to provide low cost housing to low-income Pakistani families. The housing scheme isbelieved to raise the bar for country’s economy and banking sector by helping out the low income families to facilitate them with easy living.
The rate of capital gains tax on disposable of securities has also been reduced from 15 percent to 12.5 percentso that people have to pay less on the securities and this increases the chances for more investment and value creation.
Overall, in the period of Corona Crisis the government has aimed to facilitate the citizens and allocate budget for the development of Pakistan especially the construction sector and real estate industry.This gateway to stabilize the economy will be fruitful as it encourages development and will have a multiplier effect on the economic structure of Pakistan.
This budget has relatively positive impact on the construction and real estate sector of Pakistan. The real estate industry is flourishing day by day in Pakistan as people have more knowledge about investing in properties as well as easy access to get recognized information on housing schemes/ available projects etc. Land appreciates over time thus real estate business has always continued to grow in Pakistan.