ATL buyers face a 1.25% withholding tax, while non-ATL rates rise to 18.5% for properties valued above Rs100 million

ISLAMABAD: The Federal Board of Revenue (FBR) has updated withholding tax rates on the purchase of immovable property for Tax Year (TY) 2027 under Section 236K of the Income Tax Ordinance, 2001.

The revised rates have been updated in accordance with the Finance Act, 2026 and are calculated on the fair market value of the immovable property.

ATL property buyers to pay 1.25%

According to the FBR’s withholding tax card, persons appearing on the Active Taxpayers List (ATL) will be subject to a withholding tax rate of 1.25% across all three property value slabs.

For Non-ATL persons, the applicable withholding tax rates vary according to the fair market value of the property.

The rate starts at 10.50% for properties valued up to Rs50 million and rises to 18.50% for properties valued above Rs100 million.

Withholding tax rates on property purchases

Fair market value of property	ATL rate	Non-ATL rate
Up to Rs50 million	1.25%	10.50%
More than Rs50 million but up to Rs100 million	1.25%	14.50%
More than Rs100 million	1.25%	18.50%

Tax applicable under Section 236K

The FBR has prescribed the rates under Division-XVIII of Part-IV of the First Schedule, read with Rule 1 of the Tenth Schedule to the Income Tax Ordinance, 2001.

The withholding tax applies under Section 236K, which governs the collection of tax on the purchase of immovable property.

The substantial difference between ATL and non-ATL rates means buyers who are not included on the Active Taxpayers List face significantly higher upfront tax costs, particularly when purchasing higher-value properties.

The updated tax card is intended to facilitate taxpayers, withholding agents and other stakeholders in determining their withholding tax obligations for Tax Year 2027.