Summary
- Pakistan’s federal government has proposed significant tax relief for property buyers and sellers in the 2026-27 federal budget to encourage investment in the real estate sector and support economic activity.
- Presenting the budget in the National Assembly, Finance Minister Senator Muhammad Aurangzeb announced plans to reduce withholding tax rates on property transactions for tax filers.
- The government has also suggested a substantial reduction in withholding tax on property sales.
Pakistan’s federal government has proposed significant tax relief for property buyers and sellers in the 2026-27 federal budget to encourage investment in the real estate sector and support economic activity.
Presenting the budget in the National Assembly, Finance Minister Senator Muhammad Aurangzeb announced plans to reduce withholding tax rates on property transactions for tax filers. Under the proposal, the withholding tax on property purchases would decrease from 2.5% to 1.25%, cutting the tax burden by half.
The government has also suggested a substantial reduction in withholding tax on property sales. If approved, the tax rate for filers would fall from 5.5% to 2.75%.
Officials expect these measures to make property transactions more affordable, increase market activity, and encourage more people to document their assets through the tax system. The proposed reductions form part of the government’s broader strategy to stimulate investment while providing relief to taxpayers.
The tax changes will take effect after parliamentary approval of the federal budget.
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