Govt proposes major reduction in property taxes in FY2026-27 budget

ISLAMABAD – The federal government is considering a major reduction in taxes on the purchase and sale of immovable property in the FY2026-27 budget to encourage growth in the real estate and construction sectors, siad the sources familiar with the development. The sources said that the government has proposed reducing the tax rate for filers on the purchase of immovable property from 1.5 per cent to 0.25pc. The tax on the sale of immovable property is also proposed to be cut from 4.5pc to 1.5pc. The sources said negotiations with the International Monetary Fund on the proposed tax relief measures are underway. However, the IMF has reportedly expressed reservations over the plan to reduce property-related taxes. The government officials believe that lowering taxes will boost activity in the property market, increase investment in the real estate sector and generate new employment opportunities. They argue that greater market activity would ultimately lead to higher overall tax revenues despite the reduction in tax rates. The proposed measures are expected to be included in the federal budget for the next fiscal year, subject to approval and ongoing discussions with the IMF. Pakistan Budget 2026-27 postponed – Check new expected date