The federal government has unveiled significant relief measures for the property sector and a reduction in super tax for the corporate sector in the Budget 2025-26.
According to budget documents, the government has eliminated Federal Excise Duty (FED) on the transfer of commercial properties, plots, and houses. Previously, a 7 percent FED was levied in the last budget.
Individuals engaged in the property business will also see relief as the withholding tax rate on property purchases has been reduced. The proposal suggests lowering the withholding tax from 4 percent to 2.5 percent for one slab, from 3.5 percent to 2 percent for the second slab, and from 3 percent to 1.5 percent for the third slab.
Additionally, the new budget proposes the abolition of FED on the transfer of commercial properties, plots, and houses.
To further incentivize the housing sector, the government has announced a tax credit for homes up to 10 marlas and flats up to 2,000 square feet, alongside a decision to promote mortgage financing. In Islamabad, the stamp paper duty on property purchases has been significantly reduced from 4 percent to 1 percent.
