ISLAMABAD, August 8, 2025 — In a major policy shift welcomed by the real estate sector, the Federal Board of Revenue (FBR) has officially withdrawn the Federal Excise Duty (FED) on the allotment or transfer of immovable property.
The announcement came through Sales Tax and Federal Excise Circular No. 2 of 2025, where the FBR confirmed: “The FED on allotment or transfer of residential and commercial plots, imposed under the Finance Act, 2024, has been withdrawn.”
The FED had been introduced last year on various categories of property transactions, particularly impacting buyers at the initial allotment or transfer stage. These duties were based on the buyer’s tax compliance status, with higher rates applied to those not appearing on the active taxpayers’ list.
Previous FED Structure on Immovable Property
| Sr. No. | Description | Rate of Duty | Condition for Applicability |
| 1 | Allotment or transfer of commercial property and first allotment or transfer of open-plot residential property by a developer or builder | 3% of gross consideration | Buyer on active taxpayers’ list at time of acquisition |
| – | Same as above | 5% of gross consideration | Buyer failed to file return by due date under Tenth Schedule provisions |
| – | Same as above | 7% of gross consideration | Buyer not on active taxpayers’ list at time of acquisition |
With the FED now removed, industry stakeholders expect an uptick in property transactions, particularly in the commercial and residential segments. The FBR’s decision is aimed at easing the burden on investors, improving market liquidity, and stimulating growth in the real estate sector, which plays a significant role in the national economy.