Pakistan Budget 2025–26: Major Tax Relief & Stimulus for Real Estate
🏠 Pakistan Budget 2025–26: Major Tax Relief & Stimulus for Real Estate
Pakistan’s federal budget for the fiscal year 2025–26 introduces significant reforms aimed at reviving the sluggish real estate sector. These measures are designed to boost property purchases, encourage construction activity, and provide relief to buyers—making it an important year for property investors.
🎯 1. Reduced Withholding Tax for Buyers
The government has cut the withholding tax on property purchases across all value slabs:
Up to PKR 50 million: reduced from 4% to 2.5%
PKR 50 – 100 million: 3.5% → 2%
Above PKR 100 million: 3% → 1.5%
✅ This change makes buying property more cost-effective and appealing.
✂️ 2. Abolition of Federal Excise Duty (FED)
The 7% FED on transfers of residential and commercial properties, plots, and houses has been completely abolished, effective from 1 July 2025
✅ This is a major relief, especially for high-value transactions.
🏙️ 3. Lower Stamp Duty for Islamabad Buyers
In Islamabad, stamp duty on property transactions has been slashed from 4% to just 1%
✅ These lower transaction costs can significantly increase property affordability.
💡 4. Tax Credits & Mortgage Incentives
The budget includes:
Tax credits for housing up to 10 marla and flats up to 2,000 sq ft
Moves to facilitate mortgage financing, making home loans more accessible
✅ These are targeted incentives to support first-time homeowners and the middle class.
⚠️ 5. Disincentive for Sellers (Controversial)
While buyers benefit, the withholding tax for sellers has increased:
Up to PKR 50 million: 3% → 4.5%
PKR 50 – 100 million: 5%
Above PKR 100 million: 5.5%
Industry experts warn this discrepancy may slow transaction activity if not addressed promptly.
📈 6. Positive Impact on Property Market
The budget sparks cautious optimism in the industry:
Stock markets reached record highs immediately after announcement
Analysts note real estate is the “real winner” of this budget for offering targeted relief
🏡 Why 2025 Is the Right Time to Invest – Estate166’s Perspective
💰 Lower transaction costs: No FED, reduced withholding tax, and stamp duty cuts will increase your return on investment.
🏠 More accessible: Tax credits and mortgage options make home ownership realistic for more people.
📈 Market Momentum: Renewed investor confidence may spark growth in housing society values.
🕒 Economic Recovery Support: These strategic incentives align with broader economic reforms, hinting at a more favorable long-term outlook.
📌 Summary Table
Measure
Before After Withholding Tax (Buyer) 3–4% 1.5–2.5% Federal Excise Duty (FED) 7% 0% Islamabad Stamp Duty 4% 1% Sellers Withholding Tax 3–5% 4.5–5.5%
📞 Take Action Today
With these proactive reforms, 2025–26 is shaping up as a defining year for Pakistan’s real estate. Now is the time to act—don’t miss out on these once-in-a-decade incentives!
📲 Contact Estate166 today for expert guidance and exclusive plot offers. Secure your future with smart real estate investments!
