ISLAMABAD: The rate of collection of advance income tax from the buyers and sellers of immovable properties are proposed to be reduced significantly in order to encourage investment in the real estate sector under the Finance Bill 2026.
Previously, the sellers with filer status were required to pay advance tax under section 236C at the rates ranging from 1.5% to 2.5%.
The rate was 1.5% where the market value was less than Rs.50 million, 2% where the market value or exceeded Rs.50 million but does not exceed Rs.100 million and rate was 2.5% where the market value exceeded Rs.100 million. Whereas, the tax rate for late filer and non-filer were significantly higher.
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However, through Finance Bill 2026 it is proposed that rate for the filer would be reduced to 2.75% to encourage documentation at actual price and facilitate transactions in the Real Estate Sector.
Similarly, for the buyers the rates are proposed to be reduced to 1.5%. Previously, under Section 236K, the rate of 1.5% was for transaction below Rs.50 million and the rate was 2% for transaction exceeding Rs.50 million but below Rs.100 million and it was 2.5% for transaction exceeding Rs.100 million. Whereas, rate for the late filer and non-filer was significantly higher.
Previously, as well as in future, the rates have been kept higher for the seller as compared to the Buyer due to the fact that the Seller is receiving the sale consideration and due to ease of cash flow can pay higher amount of tax.
Copyright Business Recorder, 2026
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