Karachi, June 11, 2025 – In a dramatic shake-up of the real estate sector, the Finance Bill 2025 has introduced sweeping changes that deliver substantial relief for buyers of immovable properties, while significantly increasing the tax burden on sellers.
The proposed amendments to Sections 236C and 236K of the Income Tax Ordinance signal a bold new direction in the government’s finance strategy.
According to the Finance Bill, the withholding tax on the sale or transfer of properties under Section 236C will rise sharply:
1. If the gross sale value does not exceed Rs50 million, the tax will increase to 4.5% (from the current 3%).
2. For sale values exceeding Rs50 million but not exceeding Rs100 million, the rate will jump to 5% (from 3.5%).
3. For transactions exceeding Rs100 million, the proposed tax is a steep 5.5% (up from 4%).
These hikes clearly shift the finance burden onto those looking to cash out of high-value real estate deals.
On the flip side, Section 236K offers welcome relief for property buyers. The Finance Bill proposes the following revised rates on purchase of immovable properties:
1. For properties valued up to Rs50 million, the tax rate is slashed to 1.5% (from 3%).
2. For values exceeding Rs50 million but up to Rs100 million, the new rate is 2% (down from 3.5%).
3. For purchases over Rs100 million, the tax drops to 2.5% (from the existing 4%).
These revised rates apply to individuals and entities listed on the Active Taxpayers List (ATL), encouraging more formal sector participation and documentation of real estate transactions.
Experts see this move by the Finance Bill 2025 as a calculated effort to boost the properties sector, encourage investment, and stimulate economic activity, while ensuring the government secures higher revenues from capital-rich sellers.
With the real estate landscape shifting dramatically under the Finance Bill, stakeholders in the properties market are bracing for a surge in transactions ahead of potential implementation.