ISLAMABAD (Dunya News) - The federal government is considering tax relief measures for the real estate sector in the upcoming Budget 2026-27, with proposed reductions in transaction taxes on property purchases and sales for tax filers.
According to official sources, the budget may include a cut in transaction taxes applicable to filers involved in property transactions. The proposed measures are aimed at providing relief to the real estate sector and encouraging documented economic activity.
Sources in the Ministry of Finance said the withholding tax imposed under Section 236K on property purchases could be reduced from 1.5 percent to 0.25 percent. The proposed reduction is being considered as part of broader efforts to ease the tax burden on property buyers.
Similarly, the withholding tax under Section 236C on property sales may also be reduced. The current rate of 4.5 percent is expected to be brought down to 1.5 percent under the proposed budget measures.
According to sources in the Federal Board of Revenue (FBR), the International Monetary Fund (IMF) has been informed about the proposed changes in taxes related to the property sector.
However, no relief is expected for non-filers in the upcoming budget. Sources said non-filers currently face a cumulative tax burden of around 10.5 percent on property purchases and sales, and these rates are likely to remain unchanged.
Officials noted that withholding tax collection during the current fiscal year from July to March increased by 29 percent compared to the corresponding period of the previous year. Despite the rise in withholding tax revenue, collections from gain tax declined compared to the previous fiscal year, which sources attributed to the impact of higher taxation on property transactions.
The proposed measures are expected to be finalized as part of the federal budget announcement for the next fiscal year.