Published in The Express Tribune, November 30th, 2021.
The government has barred all public and private development authorities from doing business with real estate agents who are not registered under the Anti-Money Laundering (AML) Act and it is also set to increase property valuation rates in 40 major cities.
The condition to suspend business with the unregistered real estate agents will come into effect on January 1, 2022, according to a notification issued by the Federal Board of Revenue (FBR) on Monday.
“Any violation of this condition shall attract penal provisions under the AML Act 2010 and AML/CFT Sanctions Rules 2020,” warned the FBR.
The FBR has issued the new order for the development of housing authorities to discipline real estate agents, who ought to get registered with the tax machinery under the AML Act 2010.
The AML law empowers the FBR to issue licence or register real estate agents under the Designated Non-Financial Businesses and Professions (DNFBPs) to prevent the offences of money laundering, predicate offences or financing of terrorism.
“No public or private development authority shall conduct business activity with any real estate agent for the transfer or registration of immovable property unless the real estate agent is registered with the FBR as the Designated Non-Financial Business and Profession (DNFBP),” said the order released on Monday.
The condition will be applicable to all real estate agents registered or dealing with development authorities, housing authorities, cooperative housing societies and other housing schemes dealing in the development of land for residential and commercial purposes, construction and sale/purchase or transfer of ownership rights.
The real estate sector has been declared a high risk area for money laundering by the Financial Action Task Force (FATF) and the FBR has been declared as a regulatory authority to discipline the sector.
Most of the black money is parked in the real estate sector and for a long time the authorities have been trying to tap this area. However, due to various lacunas, the tax collection has always remained negligible compared with the transactions and returns on them.real estate agents reigistration Circular01of2021-housing