Increase in withholding tax rates on sale and purchase of Immovable Property

Increase in withholding tax rates on sale and purchase of immovable property: Finance Act 2023 to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2023, and to amend certain laws WHEREAS, it is expedient to make provisions to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2023, and to amend certain laws for the purposes hereinafter appearing;

Through Finance Act, 2023, the withholding tax rates on sale and purchase of immovable property have been increase from 2% to 3% under sections 236C and 236K respectively. Now any person responsible for registering, recording or attesting transfer of any immovable property at the time of registering, recording or attesting the transfer will collect 3% or 6% tax of the gross amount of the consideration received under section 236C from the seller on ATL or non-ATL respectively. Similarly, the aforementioned withholding agent will collect 3% or 10.5% tax of the fair market value under section 236K from the purchaser on ATL or non-ATL respectively.

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