Karachi, April 11, 2025 – The Karachi Chamber of Commerce and Industry (KCCI) has proposed a significant tax reform aimed at revitalizing the real estate sector by suggesting income tax exemption on immovable properties valued up to Rs 10 million.
This recommendation is part of the KCCI’s comprehensive budget proposals for the fiscal year 2025–26, submitted to the government in advance of the upcoming federal budget.
According to the KCCI, the real estate sector, which supports over 45 allied industries and is a major pillar of Pakistan’s economy, is currently facing a slowdown. This is largely attributed to taxation measures introduced in Budget 2024–25, which the chamber argues have created financial hurdles for both property buyers and investors.
In its proposal, the KCCI highlighted that the existing taxation policies have disproportionately impacted low- and middle-income groups, reducing their ability to purchase homes and making property ownership increasingly unattainable. As a result, investment in the sector has declined, market activity has slowed, and the sector’s overall contribution to economic growth has diminished.
The KCCI stated, “Providing tax exemptions on properties valued up to Rs 10 million will stimulate demand, particularly among first-time homebuyers, and provide relief to financially constrained segments of society.” The chamber emphasized that this measure could serve as a catalyst for economic recovery by increasing affordability and encouraging greater participation in the housing market.
Furthermore, the KCCI believes that targeted tax relief can help rebuild investor confidence, foster inclusive growth, and reduce the housing gap in urban centers like Karachi, where real estate remains a critical component of economic activity and employment.
By addressing the barriers caused by heavy taxation, the KCCI aims to create a more balanced policy framework that supports not only fiscal objectives but also social equity and economic expansion.
The chamber’s proposals are expected to spark discussion among policymakers, particularly as the government seeks to balance revenue generation with the need to stimulate private sector growth and make housing more accessible to the general public.