ISLAMABAD: Pakistan’s federal government on Tuesday announced major tax relief for the corporate sector and property buyers in the federal budget 2025-26, to enhance economic growth and stimulate the real estate market.
According to the budget details, the super tax on annual income between PKR 200 million to PKR 500 million will be cut down by 0.5%. This move is expected to raise liquidity in the corporate sector and encourage investment.
In another major announcement, the government has reduced the withholding tax rate on property purchases. The new rates are as follows:
– Reduced from 4% to 2.5% in the first slab
– Reduced from 3.5% to 2% in the second slab
– Reduced from 3% to 1.5% in the third slab
These measures are likely to make property purchases more affordable for buyers and rouse demand in the real estate market.
Moreover, the federal excise duty on the transfer of commercial properties, plots, and houses has been abolished, which was set at 7% in the previous budget.
To promote homeownership, the government has announced a tax credit on houses up to 3,400 square feet and flats of 2,000 square feet. Additionally, the federal government has decided to encourage mortgage financing to make housing more accessible to the masses.
Meanwhile, the stamp paper duty on property purchases in Islamabad has been reduced from 4% to 1%, in a bid to facilitate property buyers.
These steps are expected to have a positive impact on the economy and provide relief to the corporate sector and property buyers.
Earlier, Finance Minister Muhammad Aurangzeb unveiled the federal budget for the fiscal year 2025–26, with a total outlay of PKR 17.573 trillion, down 7% as compared to the PKR 18.9 trillion budgeted outlay of FY25.
The Finance Minister said the IMF has shown trust in the reforms undertaken by the incumbent government and those claiming about the minibudget have turned silent now.
