Finally, the amnesty scheme is out. Apparently, amnesty scheme is much awaited and for the first time business communities screaming for amnesty. What is different in this amnesty scheme is real estate asset declaration.
The silent features of the real estate declaration are as follows;
1- If real estate is not declared or parked under Benami name. By paying 1.5X of FBR value the beneficial owner of the property can manage to document it.
Illustration if person had bought property under his wife/cousin/or servant name in the past and if the property fair value is 20mn vs FBR value of 10mn.
The person can pay 1.5% of the 1.5x of FBR value and will be entitled to legalise it. So (10mn*1.5) *1.5/100= Rs225,000 is amnesty amount
2- if the person has already declared the property but at the DC rate. He can magnify the value of property also and entitle to claim white money equivalent to fair value. The formula will remain as above
3- if any person had bought property and declared already five years ago. He can revise the fair value of the property and there will be no tax penalty
The above scheme will be game changer for economic activity. In the last two years the activity in real estate has stalled due to continuous revision in FBR rates and due to dearth of white money availability.
The quantum of property transfers is currently the slowest in last 25 years.
Now those who will avail this facility, they will not only manage or increase their white portions in their wealth statement, but also can sell & receive payment at fair value in his bank account whenever they will decide to sell the property.
Resultantly, it will be much easier for the banks to provide financing of real estate. Extremely positive for Banking deposits, revival of transactions etc.
The additional availability will also likely to channel in stock market. However, the recent depressive mode of the market may stop investors to go aggressively in short run but in medium term, market will benefit.