ISLAMABAD: The government has introduced fresh tax relief for the real estate sector to restore investor confidence and boost stalled investment, according to Federal Parliamentary Secretary for Planning and Development Hafiz Mian Muhammad Nauman.
Speaking at a seminar organised by the Lahore Chamber of Commerce and Industry (LCCI), Nauman said the construction and real estate sectors support around 70 allied industries and play a major role in job creation. He stressed the need to shift from unchecked horizontal expansion of cities to vertical urban development.
LCCI President Faheemur Rehman Saigol welcomed the relief measures, which include a cut in withholding tax on property purchases from 2.5% to 1.25%, and on sales from 5.5% to 2.75%, along with the abolition of Section 7E. He said these steps would help rebuild investor trust, though he urged the government to extend reduced FBR property valuation rates to other housing societies for equal treatment across the sector.
Nauman said he had raised real estate reform with Prime Minister Shehbaz Sharif nearly a year ago, pushing for a comprehensive construction package. He noted that unchecked urban sprawl has shrunk green spaces around major cities, with Lahore now spreading into Sheikhupura and Kasur. Nearly 150,000 to 200,000 residential plots remain vacant within Lahore alone, he said, making a strong case for vertical development.
He called the removal of Section 7E a major relief for property owners, noting that taxing non-income-generating assets had discouraged investment.
On affordable housing, Nauman said high financing costs keep home ownership out of reach for most citizens. He urged banks to offer long-term mortgage financing spanning 15 to 20 years, similar to models used in developed countries.
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