Budget 2026-27: Property Tax Relief for Filers
Budget 2026-27 proposes lower property taxes for active tax filers, reduced FBR valuation rates in major cities, and no relief for non-filers.
Pakistan's real estate sector has received significant tax relief under the proposed Budget 2026-27. The government has announced major reductions in advance withholding taxes for active tax filers, while revised FBR property valuation tables are expected to further reduce the tax payable on eligible property transactions in several major cities.
The Federal Board of Revenue (FBR) has introduced major tax relief for active tax filers on property transactions in Pakistan, while non-filers continue to face significantly higher withholding taxes.
What's Changed?
- Property sale tax reduced: Advance tax under Section 236C has been reduced from 4.5% to 1.5% for active tax filers.
- Property purchase tax reduced: Advance tax under Section 236K has been cut from 1.5% to 0.25% for active tax filers.
- Lower FBR property values: Through S.R.O. 644(I)/2026, FBR has reduced official property valuation rates by approximately 10% to 35% in several major cities, further lowering the tax payable on eligible transactions.
- No relief for non-filers: The revised concessions apply only to active tax filers. Higher withholding tax rates for non-filers remain in force and can reach up to 10% depending on the transaction.
- FBR valuation still applies: Taxes continue to be calculated using the official FBR valuation tables rather than the property's commercial market price.
- Long-term ownership benefit: Active tax filers who hold open plots for more than three years may qualify for exemption from Section 236C tax, subject to the applicable legal provisions.
To see what this means in practice, here is a side-by-side tax comparison for a property valued at Rs. 10 million, typical for a mid-range plot or apartment in societies like DHA, Bahria Town or other established housing societies.
| Tax Component | Before Budget 2026-27 | After Budget 2026-27 | Your Saving |
|---|---|---|---|
|
Section 236C - Seller Tax Reduced from 4.5% to 1.5% of property value |
Rs. 450,000 | Rs. 150,000 | Rs. 300,000 saved |
|
Section 236K - Buyer Tax Reduced from 1.5% to 0.25% of property value |
Rs. 150,000 | Rs. 25,000 | Rs. 125,000 saved |
|
Total Round-Trip Cost Combined buying and selling tax on a Rs. 10M property |
Rs. 600,000 | Rs. 175,000 | Rs. 425,000 saved |
These proposed changes could substantially reduce the cost of buying and selling property for active tax filers, while non-filers will continue to face significantly higher withholding taxes. If approved and implemented, the revised tax rates and updated FBR valuations are expected to make property transactions more affordable for compliant taxpayers.
From July 1, 2026, a Green Property Certificate (GPC) issued by the Punjab Land Records Authority (PLRA) is mandatory for all property transactions across most districts of Punjab. The GPC replaces the traditional Fard system that has been in use for centuries. If you are buying or selling property in Lahore, Rawalpindi, Faisalabad, Multan or any other Punjab city, make sure your GPC is in order before proceeding - without it your transaction cannot be completed.
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