Real estate sector: Big cuts in transaction taxes likely

ISLAMABAD: The transaction taxes on real estate sector are expected to be massively reduced in coming budget (2026-27) to reduce cost as well as attract investment of overseas Pakistanis in housing sector, it is reliably learnt.

Sources told Business Recorder that the government is actively pursuing to reduce withholding taxes and capital gains tax (CGT) on immovable properties in budget (2026-27).

The government fully realizes to reduce transaction taxes on buying and selling of immovable properties.

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The FBR has drafted different proposals to facilitate the real estate sector through Finance Bill 2026.

In this context, the Federal Board of Revenue (FBR) has already revised downward values of immovable properties, within the range of 30 to 35 percent of Islamabad, Rawalpindi, Faisalabad, Sialkot, Multan, Bahawalpur and Gujranwala from April 22, 2026.

When contacted, Muhammad Ahsan Malik, senior real estate analyst said that the government is fully committed to facilitate the overseas Pakistanis to attract foreign investment and local investors in the real estate sector.

Reportedly, the FBR informed National Assembly Standing Committee on Finance that the government is actively negotiating with the International Monetary Fund (IMF) for a reduction in the withholding tax rates on the sales and purchase of immovable properties in the budget (2026-27).

Provinces’ DC rates on immovable properties will be harmonized with the FBR rates, he said.

The donor agencies must realize that the revenue shortfall in tax collection is due to over taxation or overburden on the real estate and housing sector.

In this regard, the transaction cost of the overseas Pakistanis is likely to be reduced in the coming budget, Malik added.

Copyright Business Recorder, 2026