Are you thinking about buying or selling immovable property in Pakistan in 2026? 🏠
Before you finalize any deal, it is crucial to understand the advance tax structure imposed by the Federal Board of Revenue (FBR). Many buyers and sellers face unexpected costs simply because they are unaware of applicable tax rates.
This guide explains Section 236C of the Income Tax Ordinance, 2001 (updated for Tax Year 2026) in a clear and practical way.
What Is Section 236C?
Section 236C empowers the FBR to collect advance income tax at the time of sale or transfer of immovable property. The tax is collected by the authority responsible for:
• Registering
• Recording
• Attesting the transfer of property
This includes registrars, housing authorities, housing societies, cooperative societies, real estate projects, joint ventures, and private developers.
Who Pays This Tax?
🔹 The seller or transferor of the property is responsible for paying the advance tax at the time of registration or transfer.
🔹 The tax is adjustable against final tax liability, except where:
• The property is bought and sold within the same tax year (minimum tax applies).
Mandatory Condition: Section 7E Compliance
🚨 Important Update for 2026
No property transfer can be registered unless the seller has fully discharged tax liability under Section 7E and provided proof in the prescribed manner.
Special Exemptions You Should Know
You may be exempt from Section 236C if:
✔ You are a dependent of a Shaheed of Pakistan Armed Forces
✔ You are a war-wounded person or ex-serviceman
✔ You are a serving or retired federal/provincial government employee
✔ It is the first sale of an officially allotted property
Overseas Pakistanis Benefit 🌍
If you are a non-resident individual holding:
• NICOP / POC / CNIC
• Property purchased via FCVA or NRVA
➡ The tax deducted under Section 236C will be treated as final tax, replacing capital gains tax under Section 37.
Property Tax Rates for 2026 (Section 236C)
Your tax rate depends on your tax compliance status.
📊 Advance Tax on Sale of Immovable Property
| Property Value | ATL Filer | Late Filer | Non-ATL |
| Up to Rs. 50 million | 4.5% | 7.5% | 11.5% |
| Rs. 50m – Rs. 100m | 5% | 8.5% | 11.5% |
| Above Rs. 100m | 5.5% | 9.5% | 11.5% |
⚠ Non-ATL sellers pay more than double the tax compared to ATL filers.
Why Being on ATL Matters
✔ Lower tax rates
✔ Better liquidity during transactions
✔ No unnecessary capital blockage
✔ Smoother property registration process
📌 Tip: File your income tax return on time to remain on the Active Taxpayers List (ATL).
Key Takeaways
• Section 236C applies to all property sales and transfers
• Tax rates are significantly higher for non-filers
• Section 7E clearance is mandatory before registration
• Overseas Pakistanis enjoy final tax relief under specific conditions
• ATL status can save you millions of rupees
Disclaimer: This article is intended for general informational purposes only and does not constitute legal, financial, or tax advice. Tax laws, rates, and interpretations may change and can vary based on individual circumstances. Readers are advised to consult the Federal Board of Revenue (FBR) or a qualified tax professional before making any property or tax-related decisions.