LAHORE:
The government has rolled out relief measures for the real estate sector to revive investment and restore market confidence, even as Pakistan faces an urgent need to shift from unchecked horizontal expansion of cities to vertical urban development, said Federal Parliamentary Secretary for Planning and Development Hafiz Mian Muhammad Nauman.
Speaking at a seminar organised by the Lahore Chamber of Commerce and Industry (LCCI) on Saturday, Nauman said the construction and real estate sectors are linked with around 70 industries and play a pivotal role in employment generation.
LCCI President Faheemur Rehman Saigol, who chaired the event, welcomed the government’s tax relief, including withholding tax reduction on property purchases from 2.5% to 1.25%, on sales from 5.5% to 2.75%, and the abolition of Section 7E. He said these steps would restore investor confidence. However, Saigol said the business community expects the reduction in Federal Board of Revenue (FBR) property valuation to be extended to other housing societies and areas. He termed this demand justified and urged the government to ensure equal treatment across the sector.
Nauman said he had raised the issue of real estate reforms with Prime Minister Shehbaz Sharif nearly a year ago and advocated for a comprehensive construction package. He said unchecked urban sprawl had significantly reduced green areas around major cities, particularly Lahore.
Lahore has expanded far beyond its original boundaries, with housing schemes now stretching into Sheikhupura, Kasur and other adjoining districts, Nauman said. Instead of further horizontal expansion, Pakistan should promote vertical development to utilise existing urban infrastructure more efficiently. He noted that nearly 150,000 to 200,000 residential plots remain vacant within Lahore alone. The parliamentary secretary said the government recognised the difficulties faced by the real estate sector over the past several years, which had reduced investment and business activity. He said extensive consultations were held with industry representatives, including Association of Builders and Developers (ABAD) and other stakeholders, to formulate reforms that would facilitate the sector while protecting investors.
He also highlighted the abolition of Section 7E, describing it as a major relief for property owners. He said imposing taxes on non-income-generating assets had created serious concerns among investors and that the reforms were intended to revive market confidence. On affordable housing, Nauman said home ownership remains beyond the reach of the common citizen due to high financing costs. Without active participation of the banking sector through long-term mortgage financing, affordable housing cannot become a reality. He said Pakistan should adopt the model of developed countries where banks provide financing over 15 to 20 years.