Businesses Trust Us

Real Estate & Construction Services Needed Throughout the Year:



Consult Now



The real estate and construction sectors in Pakistan are among the most dynamic and investment-heavy industries, contributing significantly to GDP and employment. From property development and housing schemes to commercial plazas and infrastructure projects, these businesses handle large transactions, multiple vendors, and extensive regulatory requirements.
However, the complex nature of real estate accounting—combined with tax obligations under both federal and provincial authorities—demands structured financial management. This article explains the key bookkeeping and tax services that every real estate or construction business in Pakistan needs throughout the year.

Why Financial Management Is Crucial in Real Estate & Construction

  • High-value transactions and long project cycles

  • Multiple stakeholders (contractors, vendors, clients, investors)

  • Complex tax regulations and frequent changes in valuation rules

  • Compliance with SECP, FBR, RDA, and local development authorities

  • Need for profitability tracking by project or phase

Monthly Services Required

1. Bookkeeping and Cost Tracking

  • Record day-to-day transactions (material purchases, labor payments, equipment rentals)

  • Categorize costs by project, phase, or site

  • Maintain ledgers for advance payments, retention money, and subcontractor dues

  • Reconcile bank accounts, cash in hand, and mobile wallet transactions

2. Payroll Management

  • Maintain attendance and labor sheets for site staff

  • Calculate wages, overtime, and bonuses

  • Deduct payroll taxes under Section 149

  • Generate salary slips and manage contractor payments

3. Withholding Tax Compliance

  • Deduct tax on services, rentals, and supplier payments under Sections 153 and 155

  • Deposit withholding tax with CPR through IRIS portal

  • Maintain WHT statements and issue certificates

4. Monthly Sales Tax Filing

  • File monthly sales tax returns (if registered) for construction services

  • Claim input tax on cement, steel, machinery, and fuel

  • Reconcile invoices and STRN compliance

  • File returns with FBR or provincial revenue authorities (SRB, PRA, KPRA, BRA)

Quarterly Services Required

1. Financial Reporting and Project Profitability

  • Prepare income statements and cost reports per project

  • Track estimated vs. actual costs

  • Generate cash flow forecasts for ongoing and upcoming projects

  • Monitor work-in-progress (WIP) and percentage completion

2. Advance Tax Installments

  • Estimate and pay advance tax under Section 147

  • Avoid default surcharge or penalties

  • Especially applicable to builders, developers, and REITs

3. Equipment and Asset Depreciation

  • Track depreciation of construction machinery, transport, and IT assets

  • Record asset lifecycle costs for accurate tax deduction

Annual Services Required

1. Income Tax Return Filing

  • File corporate tax return under Section 114

  • Submit wealth statement and personal returns for directors

  • Declare project-wise revenue and capital gains

  • Claim deductions for interest, depreciation, and development expenses

2. Financial Statement Preparation

  • Prepare audited or unaudited financial statements

  • Include profit and loss, balance sheet, WIP schedules, and project analysis

  • Required for bank loans, investors, and SECP filings (if incorporated)

3. SECP Compliance (for Real Estate Companies)

  • File Form A and Form 29

  • Conduct AGM and prepare board resolutions

  • Update shareholding, registered office, or business activity with SECP

4. Capital Gains and Property Income Tax Filings

  • Calculate capital gains on property disposals

  • Apply Section 37(1A) tax rates

  • File property income tax under Section 15 for rental properties

As-Needed or One-Time Services

1. Real Estate Company Registration

  • Register Private Limited Company or REIT Management Company (RMC)

  • Register with SECP, FBR, and PRA/SRB

  • Apply for builder/developer registration with RDA, CDA, or LDA

2. Tax Structuring and Incentive Claims

  • Plan tax-efficient JV structures or SPVs

  • Claim deductions under Section 62, 65B, and 65E

  • Avail exemptions for low-cost housing or government-approved projects

3. Property Valuation and Advance Tax on Purchases

  • Work with FBR-approved valuers for market-based valuation

  • Pay advance tax on purchase or sale under Section 236K and 236C

  • Ensure accurate declaration in tax returns

4. Responding to FBR or SECP Notices

  • Handle audit notices or record requisitions under Section 176

  • Assist in resolving property valuation discrepancies

  • File appeals, revisions, or stay orders

Construction-Specific Bookkeeping Practices

  • Use job costing systems to allocate labor, materials, and overheads

  • Maintain billing schedules and milestone-based invoicing

  • Track retention amounts, performance bonds, and advance adjustments

  • Manage material return notes and wastage logs

Recommended Software and Tools

  • QuickBooks or Xero for cloud bookkeeping

  • Tally or Peachtree for multi-site project accounting

  • Microsoft Excel for custom cost sheets

  • Construction ERP for large developers (project planning, HR, accounts, CRM)

Why Outsource Bookkeeping and Tax for Real Estate?

  • Reduce compliance risk and penalties

  • Save time managing multiple vendors and authorities

  • Get real-time project profitability reports

  • Prepare for audits, loans, or investor meetings

  • Stay compliant with tax changes and government notices

Frequently Asked Questions (FAQs)

Q: Is sales tax applicable to real estate services in Pakistan?
Yes, certain construction services and real estate marketing fall under provincial sales tax regimes (e.g., SRB, PRA).

Q: How is capital gains tax calculated on property?
Under Section 37(1A), CGT is based on the holding period and value of the immovable property, with graduated tax rates.

Q: Can I claim construction expenses as tax deductions?
Yes, allowable costs include materials, labor, development charges, and interest—if properly documented.

Q: What is the advance tax on property sales?
Section 236C applies advance tax on sale of property (e.g., 1% for filers), which is adjustable against final tax liability.

Q: Do small real estate agents need to file tax returns?
Yes. Even commission-based property dealers or agents must file tax returns and declare income under business income heads.

Conclusion

The real estate and construction sectors deal with complex transactions, long project cycles, and heavy regulatory oversight. Accurate bookkeeping and expert tax management are essential for sustainable operations, cash flow planning, investor trust, and legal compliance. Whether you are a builder, developer, housing scheme owner, or real estate marketing firm, partnering with professional bookkeeping and tax consultants ensures your business grows on a strong financial foundation.

Scroll to Top