Islamabad – February 2, 2025 – The government is preparing to announce a comprehensive tax package aimed at boosting property transactions, following recommendations from a special task force constituted by the prime minister.
This initiative is expected to provide significant relief to the real estate and housing sector.
According to reports, the task force has proposed multiple tax concessions for both buyers and sellers to stimulate the property market. The committee, led by Minister for Housing Riaz Hussain Pirzada, has finalized a package that includes key tax revisions and incentives intended to revitalize the property sector.
Proposed Tax Reforms in Property Sector
The task force has submitted its recommendations to Prime Minister Shehbaz Sharif, outlining several strategic measures to support the property market. One of the major recommendations includes allowing the construction of three-storeyed houses instead of the current two-storeyed limit. Additionally, first-time homebuyers may receive full tax exemptions, making property ownership more accessible for new investors.
Among the notable tax reforms, the task force has proposed reducing property sales tax from four percent to two percent, lowering the buyer’s tax from four percent to 0.5 percent, and eliminating federal excise duties on property transactions. If implemented, these measures could provide a significant boost to property sales and real estate investments.
IMF Approval and Future Considerations
However, the implementation of any tax rebates remains subject to approval from the International Monetary Fund (IMF). The government is expected to bring this matter up during its upcoming meeting with the Washington-based lender next month to secure necessary permissions.
Additional Housing and Mortgage Reforms
Apart from tax relief, the recommendations also include introducing housing subsidies for low-income individuals and facilitating home loans through an enhanced mortgage policy. Under the proposed ‘Mera Ghar Mera Pakistan’ scheme, property plots would be mortgaged to release loans for home construction, with repayment terms extending from 15 to 20 years.
Furthermore, the task force has suggested increasing the taxable value of a house from the current Rs10 million to Rs50 million, which would provide additional relief to property owners. Another key recommendation is to make the Real Estate Authority operational and transfer its jurisdiction from the Ministry of Housing to the Ministry of Interior for better regulation.
Prime Minister Shehbaz Sharif has scheduled a meeting on February 3 to review these recommendations and finalize the tax package. The government aims to implement reforms that ensure sustainable growth in the property sector while aligning with economic policies.