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Construction Sector Bounces Back with 5.73% Growth
CategoriesNews Budget Construction Economy

Pakistan’s Construction Sector Bounces Back with 5.73% Growth in FY2025-26

ISLAMABAD: Pakistan’s construction sector has emerged as one of the key drivers of economic recovery, registering a robust growth of 5.73% during FY2025-26, a remarkable turnaround from the modest 1.14% expansion recorded in the previous fiscal year. The figures were disclosed in the Pakistan Economic Survey 2025-26, released by the Ministry of Finance.

The significant acceleration in growth has been attributed to improved macroeconomic conditions, a stable exchange rate, declining inflation, and a notable rise in private investment, which surged by 12.8% during the same period. These combined factors created a more conducive environment for developers, contractors, and investors to expand their activities across the country.

The construction sector holds strategic importance in Pakistan’s economy owing to its deep linkages with more than 40 allied industries, including cement, steel, glass, ceramics, paints, electrical equipment, and transport services.

The sector’s upward trajectory consequently provided a significant boost to broader industrial performance. The industrial sector expanded by 3.51%, while large-scale manufacturing recorded an impressive growth of 6.11% during FY2025-26.

Demand for key construction materials, particularly cement and steel products, also rose considerably, reflecting the heightened pace of building and infrastructure activity across urban and semi-urban areas.

Pakistan’s growing population, which reached approximately 252 million in FY2025-26, has further intensified demand for housing, transportation networks, and urban infrastructure, providing sustained momentum to the sector.

Additionally, construction remains one of the highest-employment sectors in the economy. Its extensive supply chain supports skilled, semi-skilled, and unskilled workers, while also creating business opportunities for contractors, suppliers, and transporters.

Analysts view the sector’s strong performance as a positive indicator of broader economic stabilisation, noting that continued investment in infrastructure and housing will be critical to sustaining this growth trajectory in the years ahead.

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CategoriesNews Economy Property Property Taxes Real Estate Tax Urban Developments & Planning

Punjab Recovers Rs9.3 Million But Misses FY26 Property Tax Target

LAHORE: The Excise, Taxation and Narcotics Control Department has been unable to meet its property tax collection goal for FY2025-26, despite revising property valuation rates and widening the tax base earlier in the year. With two weeks left before the June 30 deadline, officials have shifted into emergency mode.
The Director General of Excise and Taxation has cancelled all staff leave and ordered field teams to stay on active recovery duty until the fiscal year closes. As part of the crackdown, officers across the department’s five property tax zones sealed 362 properties belonging to defaulters in a single week, recovering Rs9.3 million in unpaid dues over the same period.

Zone-IV Gujar Khan stood out as the best-performing area. Excise and Taxation Officer Abdul Qadir led recoveries in the zone, followed by ETO Asim Sardar and ETO Kulsoom Zahra.

At the other end of the scale, Zone-V, which covers several upscale neighbourhoods with large, high-value properties, posted the weakest recovery numbers. Officials say complaints have already been filed with the Director General over the reporting of allegedly bogus taxable properties from that zone, raising questions about data integrity within the system.

Field officers, however, remain hopeful. They say notices have been issued to all known defaulters and enforcement operations are running throughout the day across all zones.

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Finance Bill 2026-27
CategoriesNews Budget Economy Property Property Taxes Real Estate Tax

Government Reduces Property Transfer Taxes by 50% in Finance Bill 2026-27

ISLAMABAD: The Federal Government has announced a series of significant tax reductions in the Finance Bill 2026-27, aimed at revitalising Pakistan’s real estate sector and reducing the financial burden on property buyers and sellers nationwide.

Under the new measures, the advance tax on property sales has been reduced by half. Sellers on the Active Taxpayers List (ATL) will now pay a flat rate of 2.75% under Section 236C, down from the previous 5.5%. Similarly, buyers who are registered filers will benefit from a reduced advance tax rate of 1.25% on the fair market value of purchased properties under Section 236K, compared to the earlier rate of 2.5%.

In a landmark move, the Finance Bill officially abolishes Section 7E, which levied a deemed income tax on immovable properties by taxing owners on a notional 5% of income, regardless of whether the property generated any actual earnings.

The Federal Constitutional Court had already declared Section 7E unconstitutional and void ab initio in May 2026, and the Finance Bill now formally removes it from the statute books.

The government has also abolished the Capital Value Tax (CVT) on foreign assets held by resident Pakistanis. Previously, Pakistanis owning properties abroad were required to pay CVT on their declared foreign wealth. The removal of this tax is expected to encourage greater transparency and documentation of overseas assets.

Furthermore, the Finance Bill introduces important amendments to Section 76(8A) regarding inherited property. The cost of an inherited asset will henceforth be recorded at the fair market value on the date of the original owner’s death, ensuring that heirs are not subjected to capital gains tax on value appreciation that occurred prior to inheritance.

It is noteworthy that while registered filers receive considerable relief, non-filers and individuals on the Non-Active Taxpayers List will continue to face substantially higher punitive tax rates during property transactions, reinforcing the government’s broader strategy of incentivising tax compliance and expanding the documented economy.

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CategoriesNews Budget Economy Tax

PM Shehbaz Signs Federal Budget 2026–27 Draft

ISLAMABAD: Prime Minister Shehbaz Sharif signed the Federal Budget 2026–27 draft on Friday after chairing a federal cabinet meeting in Islamabad. Finance Minister Muhammad Aurangzeb is set to present it before parliament the same day.

The budget carries a total outlay of Rs17.1 trillion, with a GDP growth target of 4.1 percent, an inflation projection of 8.4 percent, and an FBR tax revenue target of Rs15.267 trillion. New tax measures between Rs660 billion and Rs700 billion are also expected.

Addressing the cabinet, the PM acknowledged that taxation would create hardship but described it as necessary to correct long-standing economic imbalances. He noted that inflation had fallen from 38 percent over the past two years and the policy rate had dropped from 22.5 percent to 11 percent, though regional instability from the Gulf crisis had slowed further progress.

Key Tax Proposals

The salaried class may receive up to Rs50 billion in income tax relief through revised slabs and reduced rates on monthly earnings above Rs183,400. A 2 percent cut in the super tax rate and removal of the 1 percent advance income tax on exporters are also under consideration.

For real estate, withholding tax on property purchases for filers may drop from 1.5 percent to 0.25 percent, while the seller tax could fall from 4.5 percent to 1.5 percent. The IMF has reportedly agreed in principle to support the property tax reductions. Non-filers are not expected to benefit.

The BISP quarterly stipend may rise from Rs13,000 to Rs14,500, with Rs838 billion allocated to the programme.

All four provincial governments endorsed the national development plan through the NEC ahead of the budget’s presentation. The PM also acknowledged support from coalition partners PML-N, PPP, MQM, IPP, BAP, and PML-Q in finalising the budget.

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Sources:

  • The Express Tribune
  • ARY News
  • Pakistan Observer
  • Pakistan Today
  • TechJuice
  • Bloom Pakistan
  • Daily Pakistan
  • Business Recorder
  • Pakistan Times
  • Lahore Real Estate
Unused Government Properties
CategoriesNews Developments Economy Property

Punjab Orders Audit of Unused Government Properties

LAHORE: The Punjab government has directed 12 public-sector institutions to compile and submit comprehensive details of vacant, unused, and underutilised state-owned residential and commercial properties as part of a broader strategy to achieve an ambitious revenue target of Rs500 billion for the upcoming fiscal year.

The directive was issued by the Housing, Urban Development and Public Health Engineering Department, which has contacted nine major development authorities across the province, including those operating in Lahore, Rawalpindi, Multan, Faisalabad, Sargodha, Bahawalpur, Gujranwala, Dera Ghazi Khan, and Koh-e-Suleman.

Additionally, the Ravi Urban Development Authority, the Punjab Housing and Planning Agency, and the Punjab Central Business District Development Authority have been included in the exercise.

According to the letter issued by the department, institutions are required to submit complete records not only of properties that remain vacant or underused, but also of state assets that have previously been sold, leased, auctioned, licensed, or otherwise utilised.

The scope of the survey further extends to identifying roads, corridors, and public areas with potential for commercialisation, accompanied by actionable recommendations for their possible use.

Each agency has been tasked with conducting a thorough assessment of land and property values within its jurisdiction, evaluating commercialisation prospects, and identifying concrete revenue-generation opportunities.

The institutions are also expected to prepare detailed action plans, complete with implementation timelines, to enable them to contribute meaningfully to their individually assigned revenue targets.

The initiative reflects the provincial government’s intent to activate dormant public assets rather than relying solely on conventional taxation measures to meet its fiscal obligations. By systematically cataloguing and monetising idle state properties, Punjab aims to create a sustainable and transparent mechanism for the utilisation of public resources.

Officials have indicated that the data collected through this exercise will form the foundation of a structured revenue mobilisation plan ahead of the next fiscal year.

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CategoriesNews Budget Economy Power/Energy Tax

From Solar to Stocks: Pakistan’s Budget 2026-27 Promises Tax Continuity

ISLAMABAD: The federal government has decided to maintain existing tax rates on solar panels, stationery items, and the stock market in the upcoming Budget 2026-27, providing relief to consumers and investors who had feared potential increases.

According to senior tax officials, the earlier proposal to raise sales tax on solar panels from 10 to 18 percent has been formally withdrawn. This decision is expected to sustain the momentum of solar energy adoption across Pakistan, particularly among households and small businesses increasingly reliant on renewable energy solutions amid persistent power outages.

Similarly, the proposed hike in sales tax on stationery items will not be pursued in the forthcoming budget. The move is likely to be welcomed by students, educational institutions, and the stationery trade, which had raised concerns about the impact on affordability of any such increase.

Stock market taxation will also remain unchanged, effective July 1, 2026, offering a degree of stability to investors and market participants who have been closely monitoring pre-budget policy signals.

On the income tax front, the government intends to raise the threshold for the highest tax slab for salaried individuals. Simultaneously, the surcharge currently levied on the highest income earners is set to be abolished, representing a structural adjustment aimed at rationalising the direct tax framework.

A significant development for the export sector is the likely abolition of the one percent tax on exports. Highly placed officials confirmed that this relief measure forms part of a broader exporter support package to be announced in the budget speech. The industry has long advocated for the reinstatement of the Final Tax Regime with a one percent turnover tax, calling for protection from undue regulatory pressure.

The tax status of the real estate sector, however, remains under deliberation and has not yet been finalised.

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CategoriesNews Construction Developments Real Estate Urban Developments & Planning

Karachi’s Azeempura Flyover Set to Open After 100-Day Completion

KARACHI: Karachi is finally getting a new flyover. The Azeempura Flyover has been completed and will open to traffic within a week, Mayor Barrister Murtaza Wahab confirmed during a late-night inspection of the site.

The project was completed in 100 days, meeting a deadline set by Sindh Chief Minister Syed Murad Ali Shah. The main structure is fully built. Workers are now finishing the final touches, road surfacing, signage, and safety installations, before the bridge opens to the public.

The flyover connects Shahrah-e-Bhutto to the road leading toward Jinnah International Airport. This is one of Karachi’s most congested routes, and the new bridge is expected to ease traffic, especially during morning and evening rush hours.
The project was carried out by the Karachi Metropolitan Corporation (KMC) under the supervision of the Sindh government. Officials say this flyover is part of a larger plan to fix Karachi’s long-standing traffic problems. The city is also seeing work on signal-free corridors and road rehabilitation projects as part of the same drive.
Mayor Wahab confirmed the news on social media, saying the bridge construction is complete and the flyover will be opened for public use before the deadline.

For Karachi residents, this is welcome news. The city has struggled with severe traffic congestion for years, and infrastructure projects of this scale have often faced delays. Completing this one on time marks a rare and notable achievement for the city’s administration. The exact inauguration date has not been announced yet, but authorities expect it to be open within days.

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CategoriesNews Property Property Laws Real Estate Real Estate Investment

Lahore Bans Property File Trading From July 1, Only PLRA Certificates Will Be Valid

LAHORE: If you buy or sell property through a “file” in Lahore, your time is running out. Starting July 1, 2026, file-based property trading will no longer be allowed in any housing scheme across the city.

The Lahore Development Authority (LDA) announced the move on Monday. LDA Director General Tahir Farooq made it clear that this applies to both private and public housing schemes. No exceptions will be made.

From July 1, all plot transactions must be done through a property certificate issued by the Punjab Land Records Authority (PLRA). Think of it as a digital title deed official, traceable, and tamper-proof.

Each property certificate will carry a QR code. Scan it, and you instantly get all the details about that plot. No more confusion. No more disputed records.

Housing societies have until June 30 to migrate their records to PLRA’s digital system, called the Housing Societies Management System (HSMS). This is mandatory. Societies that fail to comply and are operating within LDA’s jurisdiction will face legal action.

To ease the transition, LDA and PLRA will jointly train private sector housing schemes on how to use the new system. Private schemes will also be able to issue their own green certificates and registrations through a dedicated digital portal.

At the meeting, representatives from ABAD, the Board of Revenue Punjab, and LDA all welcomed the move. They said digitising property records will build investor trust and bring much-needed transparency to Lahore’s real estate market.

For ordinary buyers and sellers, the message is simple: deal in certificates, not files or risk standing outside the law.

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Automate Income Tax Collection Using AI
CategoriesNews Tax

PM Shehbaz Orders FBR Pilot Project to Automate Income Tax Collection Using AI

ISLAMABAD: Prime Minister Shehbaz Sharif on Thursday directed the launch of a pilot project for a proposed automated income tax collection system in the federal capital, Islamabad, marking a significant step in the government’s ongoing efforts to modernise Pakistan’s revenue infrastructure.

The directive was issued during a high-level review meeting chaired by the Prime Minister at the Prime Minister’s Office, attended by Finance Minister Muhammad Aurangzeb, State Minister for Finance Bilal Azhar Kayani, and other senior officials. The meeting conducted a detailed assessment of the Federal Board of Revenue’s (FBR) ongoing reform measures to make inland revenue collection more effective, transparent, and faceless.

Addressing the gathering, Prime Minister Shehbaz described the initiative as a milestone in the government’s broader reform agenda. He stressed that minimising human intervention and curtailing discretionary powers within the tax collection mechanism were urgent priorities, as they would directly reduce corruption and improve institutional accountability.

The proposed system is designed to leverage modern technology and artificial intelligence to identify under-declared income and assets by cross-referencing data across property, vehicle, and banking records. To further strengthen the framework, the meeting proposed establishing three dedicated wings: a National Faceless Audit Wing, a National Assessment Wing, and a Field Operations Wing, each intended to streamline and safeguard the integrity of the tax process.

The Prime Minister affirmed that the successful implementation of this system would not only boost national revenue but also foster greater transparency, fairness, and public trust in the taxation system. He reiterated the government’s commitment to continuing FBR reforms to comprehensively document the economy and meaningfully expand the tax net.

On a separate note, the Prime Minister commended provincial governments for their decisive action against illegal cigarettes, with additional tax collection from the sector projected to reach Rs40 billion this fiscal year.

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Federal Government Real Estate Management Authority
CategoriesNews Developments Economy Real Estate Urban Developments & Planning

NA Standing Committee Approves Bill to Establish Federal Government Real Estate Management Authority

ISLAMABAD: A National Assembly standing committee has formally recommended the creation of a dedicated Federal Government Real Estate Management Authority to oversee and optimise the management of state-owned properties across Pakistan.

The proposal, unanimously approved by the National Assembly Standing Committee on Cabinet Secretariat, has been forwarded to the National Assembly for full legislative passage.

The committee, chaired by Malik Ibrar Ahmad, convened to address longstanding concerns regarding the mismanagement and illegal occupation of government-owned land. Members highlighted that numerous federal properties remain either encroached upon or underutilised, failing to generate meaningful economic returns for the state despite holding considerable commercial value.

Malik Ibrar Ahmad underscored the gravity of the issue, noting that government-owned properties had been illegally occupied over extended periods. He cited the example of railway land recovered through intervention by the Standing Committee on Railways, noting that rapid urban expansion and commercial development have substantially increased the value of such assets in recent years.

The cabinet secretary informed committee members that the federal government holds an extensive portfolio of commercial, urban, and rural properties spread across the country. These assets are currently distributed among various ministries, divisions, and government organisations, resulting in fragmented oversight and widespread inefficiency. Previous efforts to improve returns from these holdings have largely yielded unsatisfactory outcomes.

The proposed authority would consolidate oversight responsibilities, managing, leasing, and supervising federal properties in accordance with government approvals, with a clear mandate to maximise economic utility.

In the same session, the committee approved several additional legislative proposals, including the Archival Material (Preservation and Export Control) Amendment Bill, 2026, the Abandoned Properties (Management) Amendment Bill, 2026, and the Oil and Gas Regulatory Authority (Amendment) Bill, 2026. Officials stated that these legislative measures collectively aim to strengthen governance, enhance administrative efficiency, and align legal frameworks with ongoing institutional reforms.

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