Islamabad, July 8, 2025 – In a bold fiscal strike that has sent shockwaves across Pakistan’s real estate market, the Federal Board of Revenue (FBR) has enforced enhanced advance tax rates on the sales and transfers of immovable property, effective July 1, 2025.
Under the sweeping new reforms introduced via the Finance Act 2025, the FBR has issued strict directives to all property registrars—across housing authorities, societies, joint ventures, and real estate developers—to implement the elevated tax rates at the time of every property sale or transfer. This aggressive enforcement strategy is aimed at boosting revenue and tightening the grip on Pakistan’s booming property sales sector.
The tax hike specifically targets sellers involved in property sales, increasing their withholding obligations under Section 236C of the Income Tax Ordinance, 2001. The amendment significantly raises the advance income tax burden on those selling property, particularly in high-value transactions.
Here are the explosive new tax rates:
• For property sales valued up to Rs50 million: Tax jumps from 3% to 4.5%
• For sales between Rs50 million and Rs100 million: Tax increases from 3.5% to 5%
• For sales exceeding Rs100 million: Tax soars from 4% to a hefty 5.5%
According to Section 236C, all officials responsible for recording, registering, or attesting property sales—whether they represent municipal authorities, housing schemes, or private real estate firms—are legally bound to deduct and deposit this advance tax with the FBR at the time of transaction.
This move is being seen as the FBR’s no-nonsense crackdown on undocumented wealth flowing through property sales and aims to ensure maximum tax compliance from the high-stakes real estate sector.
Experts warn this could lead to short-term market slowdowns, but the FBR insists it’s a necessary step to restore fiscal discipline and end the era of under-taxed property sales. As the real estate world braces for impact, one thing is clear: selling property in Pakistan just got a whole lot more expensive.