The Expected Effect of Budget 2013-14 on 5 Marla Houses, Reports Zameen.com

Online, July 19, 2013 (Newswire.com) - Pakistan's realty market has been always a good sector to invest for both commercial and domestic purposes. Regardless of the off and on turbulent conditions of the country the realty market has been experiencing a boom especially Islamabad and Lahore realty market are particular favourites with the investors. With the general upward trend in the realty market of Pakistan, property seldom gets hit due to any fiscal postulates or circumstances. Yet the budget of 2013-14 came to change a lot of things for the realty market.

The budget has put some due luxury property taxes on large properties but the imposition of taxes on 5 marla housing has hit the common man real hard. The team at Zameen.com is diligently sitting down to analyse the possible outcomes of this budget on Pakistan's real estate market. Of the most basic evaluations done in this regard, some results which are very poignant are written down in this report for the reader's enlightenment. Primarily a whirlwind of inflation is expected as there are multiple ways in which the common man will be affected.

For one, increased taxes on construction materials will make it harder than ever for the common man to ever dream to build their own homes let apart the more than 8 million plus homeless people to even think about owning a home. Not only will that hinder property growth but also the finished products would be very expensive. This would automatically mean less growth and lower quality of construction if they have to come in the price tag people can afford. This would automatically make the posh areas like Bahria town in Lahore, DHA and other housing societies, more expensive even when utilizing cheaper construction materials.

The budget 2013-2014 postulates another clause that demands up-gradation of property in posh area from category C or B to A. All property which is posh has to come in category A. This clause is going to hit the small buyer and common man as the imposition of luxury tax on 5 marla houses in category A areas essentially targets small time buyers and owners. This step singularly will curb the endeavour of the common man to jump up to a better lifestyle. There is a lot of uproar on this clause as it hits the middle class directly and makes it all the more difficult to own or buy property or even a small house in any of the upgraded posh area societies like Bahria town Lahore, BT Islamabad, DHA, Gulberg Islamabad etc.

This at the moment directly means a severe blow to the realty market of Pakistan, to the purchasing power of the people, and to a massive increase of inflammation overall, not just the realty market and an incapability to move up to posh areas unless either these taxes get renounced and relaxed or the purchase power increases. The people seem to be raising quite a hue and cry over the issue and the Supreme Court is musing over it but for all what it is worth this tax is here to stay.

For further information please visit: zameen.com