KARACHI, June 20, 2025 – In a jaw-dropping revenue leap, the Federal Board of Revenue (FBR) has recorded an astonishing 545% increase in income tax collection from transactions involving immovable properties over the past five years — a figure that signals a dramatic shift in the taxation landscape.
This meteoric rise stems from the FBR’s intensified focus on withholding income tax tied to the sale and purchase of properties, which has emerged as a dominant source of tax revenue. In the fiscal year 2023-24 alone, the FBR raked in a staggering Rs200 billion in withholding taxes on property transactions, a massive jump from just Rs31 billion in 2019-20.
The breakdown reveals even more jaw-dropping numbers. Under Section 236C of the Income Tax Ordinance, 2001—which covers the sale or transfer of properties—the FBR witnessed a mind-blowing 2300% surge, collecting Rs96 billion in 2023-24, up from a mere Rs7 billion five years ago. Meanwhile, under Section 236K, which applies to purchases of immovable properties, the tax authority recorded a 333% spike, collecting Rs104 billion this fiscal year compared to Rs24 billion in 2019-20.
The scale of this increase far outpaces the overall growth in direct taxes, which rose by 194%—from Rs1.53 trillion in 2019-20 to Rs4.5 trillion in 2023-24—highlighting just how central property transactions have become in the government’s revenue strategy.
Experts attribute the boom to two key factors: higher tax rates on properties and a rapid surge in real estate activity due to post-COVID economic recovery. The trend also underscores the increasing formalization of the sector, long criticized for being a tax haven for undocumented wealth.
In a bold move under Budget 2025-26, the government now plans to bar non-filers and individuals lacking declared wealth from purchasing immovable properties, in a bid to curb money laundering and expand the tax net.
With the FBR tightening its grip, Pakistan’s booming property sector is under unprecedented scrutiny—ushering in a new era of high-stakes enforcement and accountability.