Massive Relief Expected for Property Buyers and Sellers in New Budget
Pakistan’s government plans to cut transaction taxes on property purchases and sales in the FY2026-27 budget to reduce costs and attract investment, including from overseas Pakistanis. The Federal Board of Revenue (FBR) has already lowered property valuations by 30-35% in major cities and is discussing tax rate reductions with the IMF to simplify the taxation framework.
Pakistan’s government is preparing to slash transaction taxes on real estate in the upcoming FY2026-27 budget to revive the struggling property and housing sectors. Sources told *Business Recorder* that proposals to reduce withholding taxes and capital gains tax (CGT) on property sales are being finalized for inclusion in the Finance Bill 2026. The move aims to ease financial burdens on buyers and sellers, which industry experts argue have deterred investment in recent years. To support this, the Federal Board of Revenue (FBR) already reduced property valuations by 30% to 35% in Islamabad, Rawalpindi, Faisalabad, Sialkot, Multan, Bahawalpur, and Gujranwala, effective April 22, 2026. Discussions are underway with the International Monetary Fund (IMF) to further lower withholding tax rates on property transactions. The government is also considering aligning provincial deputy commissioner (DC) rates with FBR valuations to streamline the tax process. Muhammad Ahsan Malik, a senior real estate analyst, stated the government’s goal is to encourage overseas Pakistanis and foreign investors by lowering transaction costs. This relief is part of broader efforts to boost investment, improve documentation, and stimulate economic activity in key sectors ahead of the federal budget announcement. The proposed tax cuts follow years of high taxation in the real estate market, which stakeholders say has stifled growth. If implemented, the changes could make property transactions more affordable and attract much-needed capital into the housing sector.
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