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Abolishment of the FED:The federal government is considering scrapping the 3% FED on the first sale of all immovable properties. This could significantly reduce the cost of initial property purchases, potentially stimulating demand and market activity.
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Potential for Lower Transaction Taxes:Discussions are ongoing about reducing transaction taxes on property sales and purchases to further encourage investment and construction.
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Impact on Investors:The proposed tax changes could lead to a decrease in the cost of investing in real estate, potentially attracting more investment and boosting the overall economy.
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Focus on First-Time Buyers:The government is also considering measures to support first-time homebuyers, such as tax exemptions or subsidies, to encourage homeownership.
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Exemption of FED for First-Time Buyers:The Federal Excise Duty (FED) is now waived for first-time property purchases, with full taxes still applying to subsequent transactions.
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Capital Gains Tax (CGT):The CGT rate for properties bought after July 1, 2024, is a flat 15% regardless of holding period.
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Withholding Taxes:Withholding taxes on property sales remain unchanged at 3-7%.
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Wealth Reconciliation for Investments:There are discussions about waiving wealth reconciliation requirements for real estate investments up to Rs50 million.
The real estate sector in Pakistan has always been a cornerstone of the economy. In 2025, with growing urbanization, increased investment from overseas Pakistanis, and new government policies, the future of real estate in Pakistan looks promising, but also comes with some challenges, especially regarding tax reforms.
Here’s an overview of what’s happening and what to expect.
The Future of Real Estate in Pakistan
1. Increased Demand for Housing
Pakistan’s population is growing rapidly, creating a huge demand for residential properties. Cities like Lahore, Karachi, and Islamabad are expanding, with new housing societies and mega projects such as DHA, Bahria Town, and Capital Smart City shaping the future landscape.
Affordable housing is becoming a major focus, and the government is pushing developers to offer projects for middle and lower-income groups.
2. Rise of Smart Cities and Technology
The future of real estate is digital. More developers are now integrating smart technologies like automated security systems, energy-efficient homes, and e-services in new societies. Online platforms for property buying, selling, and investing (like Estate 92) are growing fast, making transactions more transparent and efficient.
3. Overseas Investment Boom
Due to favorable exchange rates and better transparency, overseas Pakistanis are increasingly investing in real estate back home. Many projects now offer special quotas and incentives for expatriates.
4. Shift Towards Commercial Real Estate
Another strong trend is the growth in commercial real estate. With more businesses setting up offices and retail outlets, demand for commercial spaces — especially in premium areas like DHA, Gulberg, and Bahria Town — is expected to grow sharply.
Latest News About Taxes on Real Estate in Pakistan (2025)
Taxation is a hot topic right now in Pakistan’s real estate market. Here’s the latest update:
1. Higher Capital Gains Tax (CGT)
The government has increased the Capital Gains Tax (CGT) on the sale of properties.
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For short-term investors (selling property within 1-3 years of purchase), the CGT is higher.
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If you hold a property for more than 4 years, the CGT rate is much lower, encouraging long-term investment.
2. Higher Advance Tax on Sale/Purchase
In the 2024-25 budget, advance tax rates were also increased:
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For filers (those registered with FBR), the rate is slightly higher but manageable.
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For non-filers, the advance tax rate is significantly higher, making it costlier for undocumented investors to buy or sell property.
3. Focus on Documentation and Valuation
The government is strictly enforcing property valuation based on market rates rather than older DC rates. This move is aimed at reducing black money in real estate transactions and increasing transparency.
All property buyers and sellers are now required to declare the proper source of income when making transactions. This is part of Pakistan’s broader strategy to comply with FATF regulations and improve the financial system.
4. Incentives for the Construction Industry
On the positive side, the government continues to offer tax relief packages to builders and developers to boost housing projects and create jobs. Special amnesty schemes were offered in the past to legalize investments in construction projects with minimal taxation.
Conclusion
The future of real estate in Pakistan is full of opportunity, especially in urban residential and commercial sectors. However, new tax laws and stricter documentation requirements mean that investors need to be more careful and well-informed.
Smart investment decisions, working with registered real estate agents, and understanding new tax laws are now more important than ever.
Whether you’re a buyer, seller, or investor, staying updated with real estate news and choosing trusted platforms like Estate 92 can help you succeed in Pakistan’s evolving property market.
