The federal government is planning to give a major relief to the real estate sector by reducing Withholding Tax and Capital Gains Tax along with other revitalising steps to make property transactions simpler and easier.
The government has been working to boost up the real estate market which has long remained stagnant. As a part of this goal the government is trying to reduce the cost of property caused by tax burden upon transaction.
According to Business Recorder FBR is carrying out the required steps:
WTH Tax and CGT Reduction
The transaction costs are being aimed by the government for reduction, specifically WithHolding Tax (WTH) and Capital Gains Tax (CGT). These taxes are paid to the government when a property is sold or bought. Less tax can significantly lower down the cost on the transaction process.
According to Business Recorder, FBR told the National Assembly Standing Committee on Finance that they are negotiating the tax reduction with the International Monetary Fund (IMF) to be included in the upcoming fiscal budget.
FBR Proposals
FBR is the main body dealing with reforms in real estate with the purpose to attract foreign investment by overseas Pakistanis. In addition, it can speed up the real star cycles. FBR is currently working on different proposals for the upcoming budget 2026-2027. These proposals are to be submitted to the government for approval.
Immovable Property Valuation Reduction
As a part of the broader picture, FBR has also reduced the immovable property values for multiple cities since April 22, 2026. These cities include Islamabad, Rawalpindi, Faisalabad, Sialkot, Multan, Bahawalpur, and Gujranwala.
Harmonized FBR and DC valuation
For many years, FBR collected taxes on the basis of its own property values while provincial property taxes were collected on the basis of DC values. However, each valuation system had a major gap from each other with one former closer to market values and later one with lowest values. Among other real estate reforms, aligning both FBR values and DC values is also being assessed by the government.
The ultimate goal of all the efforts is to facilitate the common man in the real estate market. Simplifying the tax process, reducing property transaction costs and convincing international authorities for support to the local property market, all is an attempt to attract maximum investment.