Pakistan to Enforce Tough Real Estate Tax Laws Amid IMF Loan Talks

The International Monetary Fund (IMF) has pressed Pakistan to step up its crackdown on tax evasion in the real estate sector as part of ongoing discussions to unlock a $1 billion installment from the $7 billion loan package. In response, Pakistan has committed to operationalizing the Real Estate Regulatory Authority (RERA) to strengthen tax enforcement in the industry.

Authorities are set to implement stringent penalties for underreporting property values, with real estate agents facing fines of up to Rs500,000 for failing to register properties. Additionally, those found guilty of providing false property details may incur penalties ranging from Rs200,000 to Rs500,000.

For more serious infractions, RERA will have the authority to impose prison terms of up to three years.

The loan negotiations will continue until March 15, 2025, progressing through two stages: an initial phase of technical discussions, followed by higher-level policy negotiations.

An IMF delegation will engage with officials from key financial institutions, including the Ministry of Finance, Federal Board of Revenue (FBR), Power Division, and the State Bank of Pakistan, to assess economic and tax reforms.

The discussions will prioritize taxation on agricultural income, property dealings, and retail sector compliance. Additionally, the IMF will provide guidance on fiscal planning for the upcoming budget.

Parallel consultations will be held with provincial authorities in Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan to evaluate taxation strategies and revenue collection initiatives at the sub-national level.