In Budget 2025-26, major reforms have been proposed to ease the tax burden on Pakistan’s property sector. The recommendations aim to reduce transaction taxes and revive real estate investment, ARY News reported.
According to reports, key proposals from various sectors are being reviewed, including significant recommendations from the Economic Policy and Business Development think tank regarding the property sector.
The economic think tank has suggested lowering the current tax burden on property transactions, which has reportedly reached up to 11 percent. For Budget 2025-26, the think tank has proposed reducing transaction taxes to 2 to 2.5 percent.
Currently, property sale and purchase taxes range from 3 to 4 percent. The proposed reforms include cutting taxes on property sales to between 1.5 and 2 percent, while completely eliminating taxes on property purchases.
In addition, the think tank has advised removing advice and sales tax on the construction sector. It has also recommended easing Section 7E related to real estate activity, restoring Section 9A under the second schedule, and activating the Pakistan Real Estate Regulatory Authority.
Read More: Govt plans over Rs1 trillion development budget for FY25-26
The think tank believes that reviving the property sector could help curb capital flight and encourage domestic investment.
These suggestions, if incorporated into Budget 2025-26, may play a vital role in revitalising the real estate market and boosting economic activity across the country.
As the presentation date approaches, more detailed insights into the final framework of Budget 2025-26 are expected.
Earlier, the federal government will allocate over a trillion for the development budget in the upcoming fiscal year 2025-26, with preparations underway for the Annual Plan Coordination Committee (APCC) meeting scheduled for June 2.
The proposed development budget of Rs1, 065 billion on uplift projects, with Rs170 billion for the National Highway Authority (NHA) and Rs140 billion for water resources projects.
According to sources, the Power Division is set to receive Rs105 billion, while Rs50 billion is proposed for higher education initiatives.
They added that the development budget of Rs4 billion is suggested for National Food Security projects, Rs3 billion for the Ministry of Information and Broadcasting, and Rs3 billion each for industry and production sectors.
The sources said that further allocations include Rs3.5 billion for maritime affairs and Rs1.5 billion for inter-provincial connectivity projects.
The sources confirmed that the proposals will be presented for approval at the Annual Plan Coordination Committee meeting, aiming to bolster infrastructure and economic growth across various sectors in the next fiscal year.
