Budget 2026–27 aims to improve liquidity and stimulate real estate activity
ISLAMABAD, June 12, 2026 — Pakistan proposes cut in property withholding tax under the federal Budget 2026–27, aiming to support construction activity and revive momentum in the real estate sector.
Under the proposed changes, withholding tax on property purchases for tax filers would be reduced from 2.5% to 1.25%, while tax on property sales is proposed to fall from 5.5% to 2.75%.
Relief for Property Buyers and Sellers
Officials said the revised structure is designed to reduce transaction costs and improve liquidity in the property market.
The move is expected to benefit both buyers and sellers by making property transactions more affordable and encouraging greater market participation.
Boost for Construction Activity
Policy makers said the reduction is intended to stimulate construction-related activity, particularly in urban housing and commercial development projects.
The government hopes lower transaction taxes will help unlock stalled investment and encourage new real estate development.
Part of Broader Fiscal Reforms
The proposal is part of wider Budget 2026–27 measures that include tax adjustments across multiple sectors aimed at improving economic activity and expanding documentation within the economy.
Officials said the overall policy framework focuses on balancing revenue needs with growth-supportive reforms.
Expected Market Impact
If approved, the revised withholding tax rates are expected to provide relief to investors and end-users, while potentially increasing transaction volumes in the property sector.
Analysts say the success of the measure will depend on overall economic stability and confidence in the broader real estate market environment.
