After the fiscal budget 2025-26 is approved by the National Assembly with all its good or bad amendments in the tax policies, the new tax regime for real estate will be applicable from 1st July 2025. It is quite pertinent at this moment to explain which taxes are payable by the seller and purchaser of a property during the new tax year until there are no further changes.
We will come straight to the topic, and discuss which taxes are normally payable during and after a property transaction, and what changes have been made in this fiscal budget.
Taxes Applicable on Property Buyer
- Withholding Tax (236K): 3% of FBR Value
- Stamp Duty or Capital Value Tax (CVT): 2% to 5% of DC Value
- Federal Excise Duty (FED): 3% of Property Value
Taxes Applicable on Property Seller
- Withholding Tax (236C): 3% of FBR Value
- 7E Certificate Tax: 1% of Property Value above 2.5 Crore
- Capital Gains Tax (CGT): 15% of total gain at the time of filing of returns
Note: Above tax rates were applicable in previous property tax regime for active tax filers and properties valued under 5 crore.
Changes Approved in Fiscal Budget 2025-26
- FED Tax has been abolished
- Withholding Tax (236K) has been decreased to 1.5%
- Withholding Tax (236C) has been increased to 4.5%
- Stamp Duty in Islamabad has been reduced to 1%
Taxes Applicable on Property Transactions from July 2025
From 1st July 2025, property taxes on all transactions across Pakistan will be applied according to the new tax policy. Now the purchaser has to pay lower tax, whereas the seller has to pay higher tax.
Property Purchase Taxes Applicable from July 2025
- Withholding Tax (236K): 1.5% of FBR Value
- Stamp Duty: 1% of DC Value in Islamabad, no change in other cities/provinces
Property Sale Taxes Applicable from July 2025
- Withholding Tax (236C): 4.5% of FBR Value
- 7E Certificate Tax: 1% of property value above 2.5 Crore
- Capital Gains Tax (CGT): 15% of gain after sale
Note: Above tax rates are applicable for active tax filers according to new property tax regime for properties valued under 5 crore.
Withholding Tax Rates for Non-Filers & Late Filers
Property taxes on late filers and non-filers will be significantly higher under the new policy. The table below shows the complete list of withholding tax rates applicable to filers, late filers, and non-filers on the sale and purchase of properties based on property values.
| Transaction Type | Value Range | Section | Filer | Late Filer | Non-Filer |
|---|---|---|---|---|---|
| Property Purchase | Up to 5 Cr | 236K | 1.5% | 4.5% | 10.5% |
| Property Purchase | 5 to10 Cr | 236K | 2.0% | 5.5% | 14.5% |
| Property Purchase | Over 10 Cr | 236K | 2.5% | 6.5% | 18.5% |
| Property Sale | Up to 5 Cr | 236C | 4.5% | 7.5% | 11.5% |
| Property Sale | 5 to 10 Cr | 236C | 5.0% | 8.5% | 11.5% |
| Property Sale | Over 10 Cr | 236C | 5.5% | 9.5% | 11.5% |
