The government has announced major tax relief for the real estate sector in the 2025-26 budget. The new measures aim to reduce costs for property buyers and encourage investment in housing. Finance Minister Muhammad Aurangzeb presented these proposals during his budget speech. The government hopes these changes will boost economic activity and make homeownership more accessible.
One of the biggest changes is the reduction in withholding tax on property purchases. The tax rate has been lowered from 4% to 2.5%, 3.5% to 2%, and 3% to 1.5%. These cuts will make buying property more affordable and boost real estate transactions. The government expects this move to increase demand and stimulate investment in the housing sector.
Additionally, the government has abolished the 7% federal excise duty on the transfer of commercial properties, plots, and houses. This move will support the construction sector and encourage more property investments. Experts believe that removing this tax will help businesses and increase development projects across the country.
To promote low-cost housing, the budget introduces tax credits for houses up to 10 marlas and flats up to 2,000 square feet. The government also plans to expand mortgage financing by creating a comprehensive system to make home loans easier to access. This initiative aims to help middle- and lower-income families afford homes.
Furthermore, in Islamabad, the stamp duty on property purchases has been reduced from 4% to 1%. This step aims to address housing shortages and make homeownership easier for citizens. The government hopes these measures will strengthen the economy and expand the housing sector. With these reforms, Pakistan is taking bold steps toward economic growth and housing accessibility.