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Navigating property ownership in Pakistan requires a clear understanding of the legal framework that governs it. At Chakor, our Property Laws section breaks down legislation, regulations, and legal updates affecting buyers, sellers, developers, and investors across the country.

Stay informed so your property decisions are not just smart financially but sound legally as well.

CategoriesNews Property Laws Property Taxes Real Estate Real Estate Investment

FBR to Refund Section 7E Tax on Properties Above Rs25mn After Court Strikes Down Law

ISLAMABAD: The FBR has agreed to refund tax collected on deemed rental income from immovable properties under Section 7E of the Income Tax Ordinance, 2001, months after Pakistan’s FCC struck the provision down as unconstitutional.

The relief follows sustained advocacy by the Lahore Tax Bar Association’s Public Interest Litigation Committee, whose chairman, Waheed Shahzad Butt, had repeatedly petitioned the FBR since the FCC’s May 7, 2026 verdict voided Section 7E in its entirety, along with all notices issued under the clause since its introduction through the Finance Act 2022.

In a letter dated September 23 to all Chief Commissioners of Inland Revenue across large taxpayer, corporate, and regional offices, the FBR directed that it must not turn down revision requests filed in response to the court order and must process any refunds arising from such revisions without delay.

The reversal affects a wide pool of taxpayers, as Section 7E applied a 5% deemed-income tax on the FBR-assessed market value of properties worth more than Rs25 million.

Butt welcomed the move as a significant win for taxpayers, noting it would spare both the exchequer and litigants from prolonged legal battles. However, he clarified that the FBR’s directive is limited strictly to Section 7E and does not affect a separate, unresolved dispute over Super Tax under Section 4C, where the FCC upheld the levy but excluded certain exempt capital gains, including inherited property and long-held real estate.

Pending a broader refund mechanism, the LTBA-PILC has proposed adjusting amounts collected under both Section 7E and Section 4C against taxpayers’ FY26 liabilities, urging the FBR to extend similar expedited treatment to pending Super Tax claims.

CategoriesNews Property Laws Real Estate

Islamabad Moves Towards Digital Transformation as CDA and MCI Integrate Services with PAK App

ISLAMABAD: The CDA and MCI have taken a major step toward building a digitally enabled capital by integrating key civic services into the PAK App. The initiative aims to improve public service delivery, increase transparency, and give citizens easier access to government services through digital platforms.

Under the new system, residents, businesses, and property owners can access multiple civic facilities online, reducing the need for in-person visits to government offices. The services being introduced include property tax access and payments, water bill management, parking permits, advertising permissions, open-space approvals, generator licences, and other municipal services.

The digital platform will allow users to submit applications, upload required documents, track application progress, make payments through digital channels, and register complaints electronically. The move is expected to streamline administrative procedures and create a more efficient, accountable service framework.

CDA and MCI stated that the initiative is part of their broader vision to develop a smart, modern, and citizen-focused Islamabad through technology-driven governance. The transition towards digital records and online processing is also expected to improve monitoring, reduce paperwork, and strengthen transparency across civic operations.

The development marks an important milestone in Islamabad’s digital transformation journey, supporting improved interaction between government institutions, citizens, and businesses while aligning the capital with modern urban management practices.

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CategoriesNews Economy Investment Property Laws Property Taxes Real Estate Investment

Faulty Formula in FBR’s New Tax Return Form Is Overcharging Taxpayers, Warns PTBA

ISLAMABAD: The Pakistan Tax Bar Association has urged FBR to urgently fix a calculation error in its new income tax return form, warning that it is charging some taxpayers more than the law actually requires.

In a letter to FBR Chairman Rashid Mehmood Langrial, the PTBA said the fault lies in how the IRIS system handles “minimum tax,” a baseline amount already deducted or withheld on certain kinds of income that the law says should count in full toward a taxpayer’s minimum tax obligation.

Instead, PTBA says, IRIS splits a person’s income across different sources and taxes the remainder at an average rate, effectively piling an extra, unjustified demand on top of tax already paid.

To illustrate the unfairness, the bar association pointed out that two taxpayers earning the exact same income could end up owing different amounts, with the one who had tax withheld in advance actually paying more overall than someone who didn’t, purely because of how the system calculates things.

PTBA noted that the law already deals with a similar scenario correctly under the Final Tax Regime, where income taxed at source is treated as a separate block and excluded from normal-rate calculations. It says IRIS fails to make the same exclusion for minimum tax cases, meaning the same income essentially gets taxed twice.

The association has shared sample calculations with FBR to back up its claim and argued that building such formulas into the software amounts to interpreting the law itself, something it says neither FBR nor its technology arm, PRAL, has the authority to do, particularly since taxpayers have no option but to accept whatever the system generates.

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CategoriesNews Property Property Laws Property Taxes Real Estate Investment

Property Tax Windfall Signals Capital Flight Reversal, But Experts Warn of Real Estate Bubble Risk

Withholding tax collected from immovable property transactions climbed 57 percent in FY26, even as the government slashed advance tax on property purchases by half in the FY27 budget to encourage investment. The concession followed a marked surge in real estate prices, with plots in parts of Karachi reportedly multiplying in value within six months.

Analysts link the trend to reversed capital flight from the Gulf, particularly the UAE, as regional instability tied to the US-Iran conflict prompted funds once parked abroad to return.

Stronger remittance inflows and higher dollar liquidity from exchange companies have reinforced this shift, bolstering forex reserves and domestic liquidity.

However, concerns are mounting that this capital is settling into largely unproductive assets- vacant plots rather than industry or the stock market- which remains less attractive given its risk profile and a plateauing outlook.

Pakistan’s investment-to-GDP ratio continues to languish near record lows, with high taxation, weak industrial competitiveness, and regulatory hurdles cited as key deterrents to formal-sector investment. Some inflows reportedly still move through informal hundi-hawala channels, avoiding documentation altogether.

Officials are said to be exploring an investment vehicle for overseas Pakistanis to help finance $6.5 billion in public-private partnership projects, though critics argue such measures should have been introduced earlier.

A historical precedent is being cited: after Pakistan’s 1998 nuclear tests triggered a freeze on foreign currency accounts, banks led by HBL used incentive schemes to keep the resulting rupee liquidity within the formal banking system.

With regional tensions unresolved and capital inflows expected to persist, policymakers, the central bank, and commercial banks face renewed pressure to channel this liquidity into productive sectors or government securities before speculative pressures in real estate deepen further.

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CategoriesNews Developments Property Property Laws Real Estate Real Estate Investment Urban Developments & Planning

733 Karachi Development Projects Worth Rs59bn Go Online in Transparency Push

KARACHI: The Karachi Metropolitan Corporation (KMC) has begun publishing details of 733 development projects worth a combined Rs59 billion on its website, part of a broader digital transparency drive announced this week.

Mayor Barrister Murtaza Wahab said new sections added to the KMC website cover municipal assets and properties, ongoing development schemes, a Karachi Development Map, and a Land Record Management System. The project database includes costs, approved allocations and expenditure, along with details of contractors, funding sources and the institutions responsible for each scheme.

Through the interactive map, residents can track the location, jurisdiction, cost, progress and expected completion date of ongoing road works, including a Rs173 million scheme in District East, the Rs155 million Patel Hospital Road project, and the Rs472 million Mirza Adam Khan Road project. Photos and videos of construction progress will also be uploaded for public monitoring.

KMC is separately digitising land records dating back decades, with future property transfers to be recorded electronically. Employee records have been shifted to the SAP system to curb duplicate or fraudulent payments, and the civic body is moving toward an account-to-account digital payment system capable of tracking every transaction.

Wahab said the shift to digital collection has already lifted revenue, with one department’s monthly collections rising from around Rs170-180 million to roughly Rs300 million last month. Revenue and receivables are expected to be linked to the digital system in the coming months.

The mayor also cited progress on the Hub Canal, cleaning of the Hub Reservoir, and the 38-kilometre Shahrah-e-Bhutto Expressway, alongside a proposed Chakor Nala Expressway meant to ease congestion around Gulistan-e-Johar and Rashid Minhas Road.

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CategoriesNews Construction Property Laws Real Estate

LDA Digitises Crackdown on Illegal Construction, Commercial Use Violations

LAHORE: The LDA has introduced a digital monitoring system to enforce against illegal construction, unauthorised commercial use of properties, land-use violations, and non-payment of dues.

Under revised standard operating procedures, the authority will process notices, sealing, and demolition proceedings through a digital file-management system. Enforcement notices will carry QR codes, while geo-tagged photographs and supporting records will be uploaded for online monitoring.

Properties facing action will be classified into three categories: illegal construction, unauthorised change in building use and non-payment of dues.

A committee headed by the chief town planner will review cases involving alleged illegal commercialisation. The committee will examine building plans, commercialisation status, legal records, court orders, previous approvals, outstanding dues and other relevant information before deciding on enforcement measures.

The committee will record decisions and supporting documents digitally, and track subsequent changes through an electronic audit trail.

Under the revised procedures, property owners will be given 15 days to address unauthorised commercial use and five days to respond in cases involving illegal construction before enforcement action is initiated.

The authority has also digitised de-sealing proceedings. Sealed properties may be reopened following payment of applicable fines, restoration to lawful status or approval from the competent authority.

LDA has warned that officials failing to comply with the new procedures may face departmental action.

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CategoriesReal Estate Investment News Property Laws Property Taxes

FBR Yet to Notify Refund Mechanism for Section 7E, Super Tax Collections

ISLAMABAD: The Federal Board of Revenue (FBR) has yet to establish a mechanism to refund taxes collected under Section 7E, the deemed income tax on immovable property, and Super Tax under Section 4C, despite more than three months having passed since a formal request for such a procedure was made.

Waheed Shahzad Butt, Chairman of the LTBA Public Interest Litigation Committee, said he had written to the FBR Chairman, routed through Board Members, seeking a notified refund process for both levies. He noted that the FBR has not issued any guidance, prescribed an application format, or designated a forum for filing such claims.

The demand follows rulings by the Federal Constitutional Court (FCC), which struck down Section 7E as unconstitutional and void from inception, nullifying all notices and proceedings initiated under the provision. Introduced through the Finance Act 2022, the levy had applied a five percent charge on properties valued above Rs25 million, based on FBR-assessed fair market value.

On Super Tax, the FCC upheld the provision’s constitutional validity but excluded certain exempt capital gains from its scope, meaning the tax cannot be charged on the sale of immovable property held beyond the prescribed holding period, inherited property, or otherwise exempt income.

Butt said the FBR’s continued silence, despite binding constitutional rulings, has left taxpayers in an uncertain legal and financial position. He proposed allowing refunds as an adjustment against tax liability for Tax Year 2026 through the annual return, with field formations directed to process such claims uniformly rather than leaving the matter to individual Commissioners or Regional Tax Offices.

He cautioned that continued inaction exposes the FBR to further litigation, including complaints before the Federal Tax Ombudsman, as affected taxpayers seek redress for amounts they believe were unlawfully retained.

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CategoriesNews Construction Developments Economy Property Property Laws Real Estate Investment

Cabinet Approves National Housing Policy 2026, Endorses New Cybersecurity Framework

ISLAMABAD: The federal cabinet, chaired by Prime Minister Shehbaz Sharif, has approved the National Housing Policy 2026 together with a corresponding implementation plan. Under the policy, housing projects will be required to fully observe zoning regulations, with priority given to vertical construction to improve land-use efficiency. 

Officials noted the policy was drafted with input from local and international experts, along with federal, provincial, and development-sector stakeholders, aiming to ensure sustainable and quality housing nationwide. Energy-efficiency standards have also been folded into the policy framework to align new construction with environmental goals.

The cabinet was additionally briefed on the Apna Ghar housing scheme, revealing that banks have sanctioned loans worth Rs220 billion for prospective homeowners, of which more than Rs32 billion has already been disbursed.

In a separate move, the cabinet approved withdrawing Pakistan’s earlier notice to terminate its 1981 bilateral investment treaty with Sweden, based on a summary presented by the Board of Investment.

On the technology front, the Ministry of Information Technology introduced the draft Pakistan Information Security Framework 2026 (PISF 2026), developed under the CERT Rules 2023. The framework is designed to establish unified baseline cybersecurity standards with centralized oversight. The cabinet approved it as a key policy document and directed its timely implementation.

Further ratifications included proposed amendments to the Pakistan Oil Refining Policy 2023, aimed at upgrading refineries to strengthen energy supply, along with decisions made during recent Economic Coordination Committee and Cabinet Committee on Legislative Cases meetings.

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Source: DAWN

CategoriesNews Property Property Laws Real Estate

Punjab Opens First Overseas Land Transfer Desk in London

LAHORE: The Punjab Land Records Authority (PLRA), in collaboration with the Board of Revenue Punjab, has inaugurated the province’s first overseas property transfer desk in London, allowing overseas Pakistanis to complete land and property transactions without travelling to Pakistan.

The facility was formally launched at the Pakistan High Commission in London on August 3, 2026, marking the first international expansion of Punjab’s land transfer services for the Pakistani diaspora.

Under the new arrangement, overseas Pakistanis can process property transfers in Punjab through the London desk in a more convenient, secure, and transparent manner. The initiative is designed to simplify documentation requirements and reduce the need for costly and time-consuming travel for land-related transactions.

Officials said the facility aims to enhance transparency, convenience, and innovation in land administration, while ensuring secure record-keeping for the diaspora community.

The PLRA is now preparing to replicate the model in Saudi Arabia and the United Arab Emirates within the next 30 days, extending overseas transfer facilities to two of the largest hubs of Pakistani expatriates.

Authorities said the expansion is part of a broader push to digitise and internationalise Punjab’s land records system, with the goal of strengthening overseas Pakistanis’ confidence in the province’s property regulatory framework and improving the overall efficiency of land-related services beyond the country’s borders.

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Pakistan’s Property Market Gains Momentum
CategoriesNews Economy Property Property Laws Property Taxes Real Estate Real Estate Investment

Pakistan’s Property Market Gains Momentum Amid Tax Cuts and Global Shifts

ISLAMABAD: Pakistan’s real estate sector is witnessing a notable resurgence, with market activity accelerating across major urban centres including Karachi, Lahore, and Islamabad. Industry analysts attribute the renewed interest to a combination of domestic tax relief measures and shifting global economic conditions, prompting both local and overseas investors to reconsider property as a preferred asset class.

At the centre of this shift is a reduction in property transaction taxes, which has lowered the overall cost of buying and selling real estate. This adjustment has made the market more accessible to genuine homebuyers as well as investors seeking stable returns. 

Adding to the momentum, the federal government has proposed abolishing Section 7E, a tax provision long criticised by property stakeholders as an unnecessary financial burden on owners. Should this proposal advance, experts anticipate it could further stimulate transaction volumes in the months ahead.

External factors are also playing a role. Rising uncertainty in the Middle East has reportedly prompted a segment of overseas Pakistanis to reassess their international investment holdings, with many turning attention toward established, well-developed housing projects back home as a comparatively secure option.

The combined effect of these dynamics has been reflected in pricing trends, with residential property values in several key cities climbing by an estimated 10 to 15 percent in recent weeks. Analysts note, however, that this growth is uneven, shaped largely by limited inventory in high-demand locations rather than a uniform market-wide surge.

Looking ahead, real estate professionals are calling for continued reform, particularly simplified taxation procedures and modernised land record systems to sustain investor confidence. 

At the same time, experts continue to urge caution, advising buyers to independently verify ownership documentation, project approvals, and development status before committing funds, rather than basing decisions solely on recent price appreciation.

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