ISLAMABAD: Federal Finance Minister Ishaq Dar on Saturday was able to hold successful negotiations with a body of real estate developers, builders, property dealers and businessmen on the basis of give and take.

It was decided that tax shall be revoked over the sale or purchase of property that was three years old and valued at four million rupees.

The property rates of 21 cities of the country were finalised for one year in the meeting. The government backed off from its demand of acquiring the services of experts belonging to the State Bank in regards to determining worth of the property.

Tax was revoked from property that valued at four million rupees and was purchased before June 30, 2013. An agreement was reached over the tax imposed on the sale and purchase of property from July 1 onwards.

Finance minister assured that the government shall give legal protection to the issues dealt regarding the sales and purchase of property. Dar clarified that the government gave no amnesty scheme, further stating that if anyone sold property worth one million rupees for ten million rupees during the past three years then they shall have to pay taxes worth nine million rupees.

According to a press statement, the main points of this discussion as agreed are: Valuation has been agreed for major cities; Valuation tables will be notified by FBR instead of valuation by SBP approved valuers; Till such time and for those areas for which no valuation tables are notified, DC rate will apply; Holding period for CGT(capital gain tax) has been reduced from 5 to 3 years; There will be no CGT on property held for more than 3 years.

Properties acquired on or after 1st July 2016: If holding period is up to 1 year - CGT 10%; If holding period is between 1 and 2 years - CGT 7.5%; If holding period is between 2 and 3 years - CGT 5%; If holding period is more than 3 years - CGT 0% / exempt.

Properties acquired before 1st July 2016: If holding period is less than 3 years - CGT 5%; If holding period is more than 3 years - CGT 0% / exempt; Valuation will apply on (i) CGT (ii) withholding taxes (iii) for the purposes of sec 111; Basic threshold of Rs 3 million for application of withholding tax on purchase of immovable property enhanced to Rs 4 milllion; and Appropriate legislation will be done to give effect to the proposed changes as agreed with all stakeholders.