Pakistan’s Real Estate Sector: Taxes and Its Impact
Pakistan’s real estate sector faces major tax reforms in 2025-2026, with revised rates for Capital Gain Tax (CGT), Withholding Tax, and Federal Excise Duty (FED). These Pakistan property taxes 2025 changes, enforced by the Federal Board of Revenue (FBR), impact buyers, sellers, and investors. This guide breaks down the new rules, their market effects, and compliance strategies.
Pakistan Property Taxes 2025: Key Changes
The FBR’s latest budget introduces stricter tax policies:
✔ Higher rates for non-filers (up to 45% CGT)
✔ Expanded withholding tax on property transactions
✔ New installment payment options for advance tax
Types of Property Taxes in Pakistan
1. Capital Gain Tax (CGT) – 2025 Rates
Taxable Event: Profit from property sales
| Taxpayer Status | Rate |
|---|---|
| Filer | 15% |
| Non-Filer | 15%–45% (varies by property value) |
Key Change:
- Previously, CGT depended on holding period (1–6 years). Now, a flat rate applies.
2. Advance Withholding Tax (Buyer & Seller)
Applicable on: Property registration/transfer
A. Sale/Transfer of Property
| Property Value (PKR) | Filer | Non-Filer |
|---|---|---|
| Up to 50M | 3% | 10% |
| 50M–100M | 3.5% | 16% |
| 100M+ | 4% | 20% |
B. Purchase of Property
| Property Value (PKR) | Filer | Non-Filer |
|---|---|---|
| Up to 50M | 3% | 12% |
| 50M–100M | 3.5% | 16% |
| 100M+ | 4% | 20% |
Key Changes:
- Tax now applies from booking to allocation (previously only at possession).
- Installment payments allowed for buyers.
3. Capital Value Tax (CVT)
- Rate: 2% of property value (paid by buyer)
- Applies to: Land, houses, commercial buildings
4. Federal Excise Duty (FED)
- Rate: 5% (on booking/allotment)
- Applies to:
- Commercial properties: All buyers
- Residential properties: Only first owner
Impact of 2025 Property Taxes on Real Estate
✅ Reduced Demand: Higher taxes discourage non-filer transactions.
✅ Price Adjustments: Sellers lower prices to offset tax burdens.
✅ Shift to Formal Economy: Buyers prefer filers to avoid penalties.
How to Minimize Tax Liability?
1️⃣ Become a Filer – Save up to 30% vs. non-filer rates.
2️⃣ Use Installment Plans – Ease cash flow for advance tax.
3️⃣ Consult Experts – Taxwork ensures compliance & cost savings.
Conclusion
The Pakistan property taxes 2025 reforms aim to boost revenue but risk slowing real estate activity. Staying compliant is critical—Taxwork’s experts help navigate these changes seamlessly.
📩 Need Tax Advice? Contact us at info@taxwork.pk or visit Business Services.