Karachi, April 1, 2026 – The Federal Board of Revenue (FBR) has implemented a major property tax relief package aimed at revitalizing Pakistan’s real estate and construction sector, signaling a strong push to attract investment and ease financial pressures on builders and developers.
According to sources within the FBR, multiple notifications under the relief package have already been issued, while additional measures are expected in the coming days. The initiative is part of broader efforts to stimulate economic activity and restore investor confidence in the property market.
A key feature of the package is the proposed exemption from scrutiny on foreign inflows for property investment. Under this provision, non-resident Pakistanis would be allowed to invest in real estate without facing questioning from tax authorities. However, officials confirmed that a formal notification for this specific exemption has yet to be issued.
In a significant operational step, the FBR has introduced an automated system through the Pakistan Revenue Automation Limited (PRAL) for generating Computerized Payment Receipts (CPRs) for non-resident investors. This system enables individuals to avail exemptions under Clause 111AC of the Income Tax Ordinance, 2001, streamlining tax compliance and reducing procedural delays.
Additionally, the FBR has issued directives regarding withholding tax under Sections 236C and 236K, which apply to the sale and purchase of immovable property. Notably, higher withholding tax rates for non-filers will not be applicable to non-resident investors, providing a significant incentive for overseas Pakistanis to invest in the property market.
Further relief has been extended to builders and developers through Circular No. 07 of 2025-26. The FBR clarified that those operating under the simplified tax regime of Section 7F—where income is calculated as a fixed percentage of gross receipts—can apply for exemption from withholding tax under Section 236C, provided they have no additional taxable income.
Taxpayers can obtain exemption certificates by applying to the relevant Commissioner Inland Revenue under Section 159, enabling them to avoid advance tax deductions and improve project cash flows.
Sources also revealed that the FBR has reduced property valuation rates nationwide, a move expected to further encourage investment and support growth in the construction sector.