Federal Minister for Housing and Works Mian Riaz Hussain Pirzada chaired the second meeting of the Task Force for development of housing sector that was held today at the Ministry of Housing and Works, Islamabad. Minister for Finance and Revenue Mr. Muhammad Aurangzeb, Minister of State for Finance and Revenue Mr. Ali Parvez Malik, Chairman Federal Board of Revenue Mr. Rashid Mahmood Langrial and all other members attended the meeting. The Task Force has been constituted by the Prime Minister of Pakistan that have representation from concerning government institutions and people from the private sector who are recently working in the real estate industry. This Task force will present a consolidated report with recommendations for the revival in the housing sector. Four working groups on key areas including Taxation Issues, Access to Finance, Urban Planning and RERA (Real Estate Regulatory Authority) and Growth Framework for Housing were initially composed with relevant group members and experts who made all out deliberations to come up with concrete recommendations. In this meeting, a detailed presentation was given on the current challenges faced by the housing sector. These challenges were listed as the gap in the demand and supply of housing units with a deficiency of 12 million, urban sprawl, planning constraints, issues with government regulatory role and the unsatisfactory involvement of private sector. Other issues noted were the high cost of taxes on sale, purchase and the capital gain along with excessive property valuation and cumbersome tax procedures with multiple taxes. It was also discussed that the issues with access to finance are due to low mortgage penetration by banks and relatively high interest rates on housing loans. After through debates, it was agreed upon that policy and banking reforms for introducing low cost housing subsidies with fixed terms and less policy rates were pressingly needed. Policy rate should be preferably in single digit to support low income strata of population for smooth access to housing finances. Moreover, innovative mortgage solutions like incremental housing microfinancing, developing digital financing platforms and implementation of foreclosure laws to mitigate risks in mortgage was conceded. While discussing the taxation issues in real estate and housing sector members strongly proposed the revision of existing taxes including 236 C, 236 K, Federal Excise Duty and stamp duty in a such a manner that may give a boost to the whole sector keeping in view the affordability and inclusivity of low and middle-income groups and the overall impact on the business activity in the industry. It was also discussed that the establishment of RERA will be recommended under the RERA Act and the master plan in major cities will be reviewed by regional development authorities. In addition to this, consensus was made on the revision in existing policies, rules and regulations to incentivize vertical expansion. Furthermore, Issues of removal of barrier for involvement of private sector on the pattern of public private partnership, urban regeneration and establishment of high-density zones to preserve agricultural came under discussion. In his closing remarks, the chair appreciated the participation of every member and termed the housing sector as the leading sector of economy with a huge potential. He vowed to report all-encompassing recommendations with quantifiable indicators and short, medium and long terms measures for the development of housing sector.
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