The federal government is considering tax relief measures for the real estate sector in the upcoming Budget 2026-27, proposing reductions in transaction taxes on property purchases and sales for tax filers.
According to official sources, the budget may include cuts in transaction taxes applicable to filers involved in property transactions. The measures aim to provide relief to the real estate sector and encourage documented economic activity.
Sources in the Ministry of Finance said the withholding tax under Section 236K on property purchases could be reduced from 1.5 percent to 0.25 percent as part of efforts to ease the tax burden on buyers.
Similarly, the withholding tax under Section 236C on property sales may be reduced from the current 4.5 percent to 1.5 percent under the proposed measures.
According to sources at the Federal Board of Revenue (FBR), the International Monetary Fund (IMF) has been informed about the proposed changes to property-sector taxes.
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 from July to March rose by 29 percent compared with the same period last year. Despite the rise in withholding tax revenue, collections from gain tax declined compared with 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.