ISLAMABAD, July 17: The provinces have opposed levying two per cent capital value tax (CVT) on transfer of ownership of urban land through ‘power of attorney’, sources told Dawn on Monday.
The provincial governments and the administration of Islamabad had sent proposals to the federal government demanding amendments to the laws regarding imposition of the tax on investment in real estate, they said.
The imposition of CVT on transfer of ownership of urban land measuring 500 square-yards and above was announced in the federal budget.
The sources said all the provincial governments and the Islamabad capital territory administration were of the view that the CVT could not be imposed because power of attorney could be issued from any part of the country and even abroad, while under the Registration Act the tax had to be paid in the area from where it was issued.
When contacted, Islamabad Deputy Commissioner Chaudhry Mohammad Ali said the federal government was considering amending the rules related to imposition of the tax.
He said almost 90 per cent of land ownership transfers were carried out through power of attorney and in such cases the CVT could not be levied.
The official said the CVT could be charged in such cases only if the purchasers and buyers submitted their registration deeds. He said the CVT could be collected only on transfer of land ownership through regular registration deeds.
The government has announced that in case the value of the property is not recorded, the CVT may be collected at Rs50 per square-yard.
