The announcement of a generous relief package to the construction sector comes as a ripple of solace in the fearful corona-situation. Prime Minister of Pakistan is worthy of appraisal and hail on upgrading the game of the building sector in the country. The strategy is being appreciated by experts from all the sectors. Let alone the construction realm, the experts from the export sector, local industry, and finance moguls have also displayed a welcoming gesture at this positive initiative. The overall idea of the package is to incite the lower and middle class into the housing sector and lubricate the economic-wheel.
The Big Good-News
The construction domain of Pakistan has experienced an unparalleled breakthrough. The government of Pakistan has elevated the rank of the construction sector, by granting it a status of ‘Industry’. A board named as ‘Construction Industry Development Board’ is also developed to promote the industry. The tax-noose has been loosened- All affiliates of the construction industry can breathe fresh airs with no ‘tax-particles’.
Pakistan’s construction industry is rebounding with exceptionally greater potential. The relief package is designed to embrace the informal mason-class needs, but the overall impact would be the trickle-up effect. The lower class will contribute vertically upwards, forming a reinforced economic condition, and putting Pakistan back on track.
Highlights
Some highlights of Prime Minister Imran Khan`s Relief for the Construction sector.
- Amnesty granted: For investors of construction businesses, disclosure of the sources of financing is not mandatory.
- Tax-noose loosened: Fix tax regime will now depend on rate per sqft or per sq yard of land development.
- More discounts: The reduced taxes will be further reduced if low-cost housing projects are being focused by the investors and developers.
- Withholding tax exemptions: WHT removed from supplies and services except for cement and steel.
- Provincial coordination to consolidate sales tax: Reduction of sales tax to 2% by Punjab and KPK.
- Heavy subsidy: PKR 3o billion subsidies announced for the Naya Pakistan Housing Scheme to be granted by the government of Pakistan. Further reduction is also expected.
- Capital gain tax waived-off: No capital gain tax (CGT) on family homes.
- Construction Industry: The construction sector of Pakistan is now upgraded to enjoy the status of an industry.
Tax and Mortgage Issue Resolution
Housing finance in Pakistan is as low as 0.25% of GDP, as compared to the 10% figure of India. This means that the financial by-laws of the country are in an ailing condition. The reason being the absence of fore-closure laws and high-interest rates in Pakistan. The new relief package has reduced the interest rates from 7% to 6% for investors attending to invest in low-cost housing units. This move is advantageous not only for Pakitan’s economy but is also expected to trickle-down the relief to a common man. This will result in the expansion of the real estate loop due to lower house-costs. Ultimately, the common man will be able to participate in the property sector and own a piece of residential land.
Development Issue Resolution
The news of relief package to the construction sector is a step in the right direction for the resolution of development issues in the country. The provision of a fixed tax regime in the domain is not less than a breakthrough in the history of developmental works in the industry. One house when constructed employs 20-30 workers. Imagine one lac homes being constructed- It is a loop of 2 to 3 million jobs. By doing a detailed analysis of the situation, one can well imagine the perks this new bundle is going to deliver to the building sector.
The resolution of the above problems is an exceptional move for the affiliated industries. From constructors, developers, real estate and property agents to engineers and masons, the whole package is a game-changer.
Activation of the Real Estate Sector
The massive housing package requires the activation of the real estate sector as well. The buying, selling, and leasing of far off buildings or houses is not something everyone has information about. Here, you need the real estate databases to assist you with finding the most reasonable property. This sector activates with the expansion and development of buildings, housing societies, plazas, and industries around Pakistan. Real estate is a part and parcel of the construction industry.
An Ending Note
The dream package is a driving force for the sad faces and serves as a ray of hope to balance the detrimental circumstances weaved by the pandemic. At this moment of an unprecedented breakthrough in the construction industry, the real estate sector is also expected to level-up. The real estate businesses and the development firms are immediate linkages of the construction sector. This relief package will not only boost the construction activities, as they are much cheaper now but is also expected to attract investors and buyers from national and international platforms. Sirmaya.com is all set to present to you the up-to-date information regarding the hot deals available for renting, buying, and selling. Stay tuned for more!
