Pakistan slashes property taxes to boost real estate

Islamabad: The federal government has announced a major reduction in withholding taxes on property transactions, providing significant relief to Pakistan’s real estate sector. Under the revised structure, the withholding tax on property purchases under Section 236K has been reduced from 2.5% to 1.25% for filers. Similarly, the tax on property sales under Section 236C, which previously reached up to 5.5%, has been lowered to a flat rate of 2.75%. As a result, the overall transfer tax burden on property transactions has been reduced to around 4%. Industry experts believe the move will encourage investment, improve market liquidity, increase transaction volumes, and support growth in construction and housing-related industries. Will this tax relief revive Pakistan’s property market momentum?