ISLAMABAD – Pakistan’s Real estate sector remains in dire straits after plethora of taxes and stern legislation about assets declaration, but there’s a sigh of relief for both buyers and sellers.
Reports in local media said the Federal Excise Duty (FED) on Property Transfers may be scrapped as the federal excise duty imposed on the transfer of plots and commercial properties is set to be repealed amid a broader effort to rekindle the real estate sector.
Officials looked into FED which has not met expectations for revenue generation, prompting the Federal Board of Revenue (FBR) to recommend its removal. The proposed move would end FED on transfer or allotment of commercial properties and the initial transfer of open and residential plots.
As part of the government’s strategy to cut the financial burden on property transactions, the task force on housing sector development is working on it and it will be implemented in new fiscal year. The task force also recommended ending Section 7E of Income Tax Ordinance, removing capital value tax (CVT) in Islamabad, and slashing transaction taxes on property dealings.
Task force also includes standardizing stamp duty rates across provinces and Islamabad Capital Territory, and rationalizing taxation policies through the National Tax Council. Furthermore, task force recommends waiving wealth reconciliation for real estate investments up to Rs5 crores.
The end of cutting construction and transfer costs would benefit the sector. As of 2025, developers are required to collect duty of 3pc on property transactions for active taxpayers, while FED stands at 5pc for non-tax filers and 7% for those not listed as active taxpayers.
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