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Category: Property Taxes

Taxes play a crucial role in shaping investment decisions, property transactions, and business strategy. At Chakor, our Taxes section demystifies Pakistan’s tax landscape as it relates to real estate, construction, and investment, covering policy updates, filing obligations, and the financial implications of every major change.

Stay ahead of your obligations and make decisions that are as tax-smart as they are financially sound.

IHC Grants Interim Relief to Islamabad Taxpayers
CategoriesNews Property Property Taxes Real Estate Tax

IHC Grants Interim Relief to Islamabad Taxpayers, Halts Property Tax Collection

ISLAMABAD: The Islamabad High Court (IHC) has suspended the collection of property tax from residents of the federal capital, delivering interim relief to taxpayers who had challenged the levy imposed by the Metropolitan Corporation Islamabad (MCI).

The order was issued by a single bench during the first hearing of a writ petition filed by Muhammad Munir Ahmed Chaudhary and Ahmed Hasan Rana, with the latter also appearing as counsel for the case.

The petition contests Gazette Notification No. 404(1)-4/2024, issued on March 14, 2024, as well as a subsequent property tax bill of Rs. 846,398, served on the petitioners on April 24, 2026. Given that thousands of property owners across Islamabad face similar demands, the case has emerged as a key test case with wide-reaching implications.

Counsel for the petitioners argued that the notification contravened the Islamabad Capital Territory Local Government Act, 2015, and the Urban Immovable Property Tax Act, 1958. They contended that MCI lacked the legal authority to impose such a tax and that the notification had been issued by an administrator rather than an elected local government body, as required by law.

It was further argued that the tax demand was arbitrary, lacking proper assessment and failing to provide taxpayers a hearing. The petitioners cited a relevant Supreme Court ruling to reinforce their position.

After hearing preliminary arguments, the court concluded that the petitioners had established a prima facie case, with the balance of convenience favouring the taxpayers. Consequently, notices were issued to MCI, its Directorate of Revenue, the Capital Development Authority, and federal authorities through the Interior and Cabinet divisions.

The bench suspended the disputed tax bills until the next hearing and adjourned proceedings for four weeks, meaning affected residents will not be required to make payments in the interim.

For more news on real estate and special reports, visit Chakor.

Sources:

99% Tax Target
CategoriesNews Budget Developments Economy Property Property Taxes Tax

Punjab Hits 99% Tax Target, Plans FBR-Like Tax Body

LAHORE: Punjab’s government has announced plans to create a unified revenue authority modelled on the Federal Board of Revenue, consolidating all provincial tax streams under a single institutional framework during the upcoming fiscal year.

Finance Minister Mian Mujtaba Shujaur Rehman disclosed the initiative at a post-budget press conference on Wednesday, citing strong performance in the outgoing fiscal year as grounds for the reform. The province met 99 percent of its tax collection target, prompting officials to raise the revenue goal for FY 2026-27 by 46 percent. Own-source revenues are projected to grow between 30 and 40 percent, a gain the minister attributed to curbing corruption within tax administration and broadening the provincial tax base.

Under the new targets, the Punjab Revenue Authority has been assigned a collection goal of Rs528 billion, while the Excise and Taxation Department will aim for Rs124 billion. Non-tax departments are expected to contribute Rs461 billion, with the Mines and Minerals Department emerging as the leading performer in that category.

Rehman noted that only modest revisions to existing tax rates were proposed for the coming year, given current economic conditions. He explained that a Rs546 billion grant to the federal government had reduced Punjab’s development budget from Rs1,240 billion to Rs752 billion, though officials maintained that no development priorities were compromised.

Addressing reporters’ questions, the minister confirmed that proposed amendments to the agricultural tax, unchanged since 1998, would apply only to landholdings exceeding 12.5 acres.

Senior Minister Marriyum Aurangzeb, also present at the briefing, rejected claims that southern Punjab or the agriculture sector were being neglected, pointing to rising acreage and crop output. She further clarified that reports of a Rs145 billion traffic-fine target were inaccurate, stating that the actual figure is Rs45 billion. Officials added that documentation for 493 new development schemes, including a laptop distribution programme, would be finalised by June 30.

For more news on real estate and special reports, visit Chakor.

Sources:

FBR’s New Digital Mechanism
CategoriesNews Economy Property Taxes Tax

FBR’s New Digital Mechanism Aims to Curb Prolonged Tax Litigation

ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a digital solution designed to expedite the resolution of tax disputes and curb prolonged litigation through a technology-driven process. The initiative was formalised under a new provision in the Finance Bill 2026, which empowers the FBR to establish a digital system to generate settlement offers for registered taxpayers prior to the issuance of final assessment orders.

The mechanism is intended to facilitate early resolution of tax proceedings by giving taxpayers an opportunity to settle disputes through a transparent, automated framework rather than pursuing lengthy adjudication. 

According to officials, the system-generated settlement offers will take into account several factors, including the stage of the proceedings, the taxpayer’s compliance history on record with the FBR, the nature of the identified discrepancy, and any other criteria the Board deems relevant.

Under the proposed framework, taxpayers who receive a settlement offer will have a ten-day window to accept it through the IRIS portal and deposit the specified settlement amount. Once payment is made, the issues raised in the relevant notice or audit report will stand abated, effectively closing those proceedings.

Commenting on the development, tax expert Arshad Shehzad said the mechanism has the potential to significantly reduce litigation, accelerate dispute resolution, and improve revenue collection by encouraging voluntary compliance. 

He noted, however, that the framework could be further strengthened by introducing an additional layer of review, suggesting that a specialised committee be established to examine taxpayers’ responses and objections before assessments are finalised, to ensure greater fairness and equity in the process.

Shehzad described the initiative as part of broader efforts to modernise Pakistan’s tax administration through technology-driven reforms, reduce compliance costs for taxpayers, and enhance certainty in tax matters.

For more news on real estate and special reports, visit Chakor.

Sources:

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.

For more news on real estate and special reports, visit Chakor.

Sources:

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.

For more news on real estate and special reports, visit Chakor Ventues.

Sources:

CategoriesSpecial Report Budget Construction Economy Property Property Laws Property Taxes Real Estate Real Estate Investment

FY2026-27 Targets 3.5% Real Estate Growth Amid Rs1 Trillion Development Cap

ISLAMABAD: Pakistan’s federal budget for 2026–27 has introduced substantial tax relief for the real estate sector, with the government seeking to revive property transactions, encourage documented investment, and generate activity across construction-related industries.

The main measures presented on June 12 include the proposed abolition of the tax on deemed income from immovable property, sharply lower advance taxes on property transactions, a Rs71 billion allocation for subsidised housing finance and customs-duty relief on specified construction vehicles.

Industry representatives have largely welcomed the measures, describing them as a possible turning point for a market that has faced weak transaction volumes and declining investor confidence.

Economists and business associations, however, have cautioned that tax concessions alone may not produce a lasting construction revival unless the government also addresses financing costs, energy prices, building-material expenses and regulatory delays.

Section 7E proposed to be abolished

One of the most important changes is the proposed omission of Section 7E of the Income Tax Ordinance.

Section 7E imposed tax on deemed income from certain capital assets, mainly immovable property, even where the property was not producing actual rental income. Property owners and industry bodies had repeatedly criticised the provision as an additional cost of holding property.

The Finance Bill 2026 formally proposes removing the section. Once enacted, the measure would reduce the recurring tax and compliance burden on qualifying property owners.

Real-estate stakeholders believe its removal could help restore investor confidence, particularly among people holding undeveloped, vacant or non-rental property.

However, the budget documents do not yet explain how outstanding disputes, previous assessments or pending cases under Section 7E will be dealt with.

Advance tax reduced for buyers and sellers

The Finance Bill proposes reducing advance income tax on the sale or transfer of immovable property under Section 236C to a flat rate of 2.75% of the gross consideration received.

For buyers, the bill sets the advance tax under Section 236K at 1.25% of the property’s fair market value.

These rates apply to taxpayers appearing on the Active Taxpayers’ List. Higher rates may continue to apply to late filers and non-filers.

There is, however, a difference between the two official documents. The Finance Bill states that the buyer-side rate will be 1.25%, while the Federal Board of Revenue’s salient-features document refers to a rate of 1.5%.

The wording of the Finance Bill is more legally significant, but the difference will require clarification before the measure is finally enacted.

The lower taxes are expected to reduce the upfront amount paid at the time of registration or transfer, particularly in higher-value transactions.

Faisalabad Chamber of Commerce and Industry President Farooq Yousaf Sheikh said the reduction could reactivate investment and encourage people to return to the property market.

He described real estate and construction as important economic sectors because of their links with cement, steel, transport, electrical equipment, paint, ceramics and employment.

Property dealers, developers and building-material suppliers also expressed optimism that lower transaction costs would improve market confidence and increase buying and selling activity.

Housing subsidies aim to support genuine demand

The budget provides Rs. 71 billion for the Prime Minister’s Apna Ghar Programme. The initiative is intended to support affordable mortgage financing for low- and middle-income households.

A separate Rs5 billion has been allocated for the Mera Pakistan Mera Ghar mark-up subsidy scheme.

These programmes could be more directly connected with physical construction than general property tax relief because housing finance is normally linked to the purchase or construction of residential units.

Their actual impact will depend on the operating rules, including borrower eligibility, maximum loan and property values, down-payment requirements, participating banks and the duration of the subsidised mark-up rate.

The federal budget also provides approximately Rs18.57 billion under the functional classification of housing and community amenities. This includes around Rs143 million for housing development and Rs18.43 billion for community development.

These amounts represent budget classifications and should not be added to the Rs71 billion mortgage subsidy as though they are part of one housing programme.

Construction vehicles receive targeted customs relief

The FBR has proposed reducing customs duty from 20% to 10% on specified specialised construction-related vehicles.

The measure may reduce equipment costs for contractors and developers importing eligible vehicles. Its effect will depend on the exact tariff codes covered by the concession.

The relief does not apply to every vehicle, machine or piece of construction equipment. Larger contractors and infrastructure companies are also more likely to benefit than small builders, who normally rent machinery instead of importing it.

Steel taxation linked to electricity use

The budget introduces a mechanism allowing sales tax in the steel sector to be assessed on the basis of monthly electricity units consumed.

The government appears to be using electricity consumption as an indicator of steel production to improve documentation and identify underreported output.

The measure may strengthen tax enforcement, but manufacturers could face difficulties where electricity consumption does not accurately match saleable production because of inefficient machinery, production interruptions or differences in product type.

It is therefore too early to determine whether the change will raise steel prices. Any direct claim about its impact on construction costs would remain speculative until detailed rules are issued and implemented.

Additional property-related tax changes

The government has also proposed abolishing Capital Value Tax on foreign movable and immovable assets held by resident Pakistanis.

This proposal applies to qualifying assets situated outside Pakistan. It does not remove taxes, stamp duties or transfer charges on property located within the country.

The Finance Bill also clarifies the cost basis to be used when inherited immovable property is later sold, along with the treatment of property transferred through family settlements after a death. The amendments may reduce disputes over capital-gains calculations, although detailed guidance will still be needed.

Industry welcomes relief but seeks wider reforms

The Federation of Pakistan Chambers of Commerce and Industry welcomed the reduction in property transaction taxes and other business concessions.

FPCCI President Atif Ikram Sheikh described the property withholding-tax reductions as positive, but said the overall budget did not fully address the conditions needed for sustained industrial growth.

The chamber highlighted high energy prices, corporate taxation, turnover taxes and the general cost of doing business as continuing concerns.

The Rawalpindi Chamber of Commerce and Industry also gave the budget a mixed assessment. Former RCCI president Raja Amer Iqbal welcomed the property incentives, while the chamber’s leadership said the budget lacked a comprehensive strategy for industrial revival and stronger export-led growth.

The Overseas Investors Chamber of Commerce and Industry similarly described the rationalisation of property advance taxes as a constructive step that could support economic activity. It nevertheless stressed that the success of the wider reform programme would depend on execution.

The business community’s response suggests that the budget is likely to support the demand side of the property market by making transactions less expensive. Construction companies, however, remain exposed to high costs for financing, energy, fuel, cement, steel and transport.

Documentation rules may limit undocumented transactions

Alongside the tax relief, the FBR has said that Section 114C of the Income Tax Ordinance will be enforced in the real-estate sector from July 1, 2026.

The provision allows authorities to restrict certain major economic transactions where a person’s declared income, assets or financial capacity do not support the value of the transaction.

As a result, a person buying expensive property may need not only the required funds but also tax records showing a legitimate and declared source of financing.

The policy therefore combines lower transaction rates with tighter documentation. It may encourage compliant investment while making high-value transactions more difficult for people operating outside the documented economy.

Public construction may remain constrained

Although the private property sector has received tax relief, the federal Public Sector Development Programme has been limited to Rs1 trillion.

The restricted allocation reflects the government’s limited fiscal space, large debt-servicing obligations and commitments under its programme with the International Monetary Fund.

A smaller federal development envelope could limit new contracts for roads, public buildings, infrastructure, water systems and other government-funded construction projects.

The outlook may therefore differ across the sector. Private housing and property transactions could improve, while contractors heavily dependent on federal development projects may continue to face a limited pipeline of work.

Experts caution against speculative growth

Former finance minister Miftah Ismail described the overall budget as offering limited relief but argued that it did not contain a strong programme for job creation, exports, economic expansion or poverty reduction.

The concern among economists is that property tax concessions can produce two very different results.

In the first, developers build new housing, offices and infrastructure, generating employment and demand for construction materials.

In the second, investors mainly trade existing plots and properties, causing prices to rise without adding significant productive capacity.

Tax relief can increase transactions, but it cannot by itself guarantee new development. Interest rates, access to mortgages, construction costs, approval procedures, utility connections and buyer affordability will determine whether the activity moves from property trading to physical construction.

Outlook

The immediate outlook is positive for property transactions and market sentiment. Lower advance taxes and the removal of Section 7E are likely to reduce costs for documented buyers, sellers and property owners.

The Rs71 billion Apna Ghar allocation could also create genuine housing demand if banks, regulators and government departments introduce practical and accessible financing rules.

The effect on physical construction is less certain. New development is likely to respond more slowly because developers must consider financing, materials, energy, approvals and consumer purchasing power.

The broad industry view is that the budget provides meaningful relief, but its success will be judged by whether it produces completed homes, commercial projects, employment and documented investment, not merely an increase in the trading and prices of existing property.

For more news on real estate and Special Reports, visit Chakor Ventures.

References

  • Associated Press of Pakistan. (2026a, June 12). FCCI hails budget incentives as catalyst for investment, exports revival.
  • Associated Press of Pakistan. (2026b, June 12). FPCCI welcomes macroeconomic stabilization in federal budget.
  • Associated Press of Pakistan. (2026c, June 12). RCCI welcomes relief measures, calls for stronger industrial support.
  • Associated Press of Pakistan. (2026d, June 12). Real estate and construction sectors welcome tax relief in the budget.
  • Business Recorder. (2026, June 13). Live updates: Budget 2026–27.
  • Federal Board of Revenue. (2026). Salient features: Budget 2026–27. Government of Pakistan.
  • Finance Division, Government of Pakistan. (2026a). Budget in brief 2026–27.
  • Finance Division, Government of Pakistan. (2026b). Finance Bill, 2026.
  • Geo News. (2026, June 13). A budget of small fixes.
  • Reuters. (2026, June 12). Pakistan budget raises defence spending, squeezes development to meet IMF goals.
fbr valuation rate pakistan
CategoriesReal Estate Investment Property Property Taxes Real Estate

FBR Valuation Rate Pakistan 2026: Complete Guide for Investors

What is the FBR Valuation Rate Pakistan? 

The FBR valuation rate Pakistan (also called the FBR property valuation rate or Fair Market Value rate) is the official per-square-yard or per-square-foot value that the Federal Board of Revenue assigns to properties in specific cities and localities across Pakistan.

Table of Contents

  1. What is FBR Valuation Rate Pakistan Used For?
  2. FBR Rate vs DC Rate vs Market Rate: The Key Difference
  3. How FBR Valuation Rates Came to Exist
  4. Latest FBR Property Valuation Rates 2025–26 City-Wise List
  5. What Changed in 2025–26? Key Updates
  6. FBR Rates by Property Type
  7. Impact on Buyers Taxes You Now Pay (Finance Act 2025 Rates)
  8. Impact on Sellers CGT and Advance Tax (Updated Rates)
  9. Worked Example: Full Buyer + Seller Tax Calculation
  10. What If Your Area Is Not Listed?
  11. Overseas Pakistanis Special Exemptions
  12. FAQs

What is the FBR Valuation Rate Pakistan Used For?

FBR valuation rate Pakistan are the base for calculating:

  • Advance tax on purchase Section 236-K (collected from buyers)
  • Advance tax on sale Section 236-C (collected from sellers)
  • Capital Gains Tax (CGT) Section 37 (tax on profit from the sale)
  • Withholding tax on property transactions
  • Unexplained investment tax Section 111

The golden rule: Your declared transaction value cannot be lower than the FBR valuation rate Pakistan. Even if you buy or sell for less, you pay taxes as if the transaction happened at the FBR rate.

FBR Rate vs DC Rate vs Market Rate: The Key Difference This is where most buyers and sellers get confused. There are actually three separate values attached to every property in Pakistan:

Value Type Set By Used For
DC Rate (District Collector Rate) Provincial Government / Board of Revenue Stamp duty, CVT, registration fee
FBR Valuation Rate Pakistan Federal Board of Revenue Advance tax, CGT, withholding tax
Market Rate Buyers & sellers in the open market Actual negotiated transaction price

Real-World Example (DHA Phase VIII, Karachi 500 Sq. Yards Residential Plot)

Value Type Per Sq. Yard Total Value
DC Rate (Sindh) ~Rs. 2,388 ~Rs. 11,94,000
FBR Valuation Rate Pakistan Rs. 20,000 Rs. 1,00,00,000
Actual Market Price ~Rs. 90,000+ Rs. 4,50,00,000+

This gap is the core problem FBR has been trying to fix for years. DC rates were set so low that real estate became the favourite place to park undeclared money. FBR Valuation Rate Pakistan was introduced to bridge this gap, not perfectly, but significantly.

Important for property valuation in Pakistan: FBR rates and DC rates serve completely different purposes and are set by different governments (Federal vs Provincial). Never mix the two when calculating your transaction costs.

How FBR Valuation Rate Pakistan Came to Exist?

Before 2016, the DC Rate Era

For decades, all property taxes, including income tax, were anchored to District Collector (DC) rates. These were set by provincial Boards of Revenue and were often not revised for 5–6 years at a stretch. The result was that DC rates were 3 to 8 times lower than actual market prices.

Real estate became a black hole for untaxed money. The government had no effective way to tax property gains because officially declared values were a fraction of real prices.

Rule 228 and the First Reforms (2002–2016)

The Income Tax Rules 2002 introduced Rule 228, which formalised DC rates as the basis for property valuation in tax matters. A 2009 amendment improved this slightly by requiring that for built-up properties, the higher of Fair Market Value (FMV under Section 68) or DC rates should apply. But since tax officers had broad discretion in determining FMV, this created its own problems.

2016 The Turning Point – FBR Valuation Rate Pakistan

The Finance Act 2016 and Income Tax (Amendment) Ordinance 2016 overhauled Section 68. The FBR was empowered to directly notify Fair Market Values through official gazette notifications, with those rates becoming the binding minimum for property transactions.

Since then, FBR has issued multiple SRO rounds covering 56+ cities with the latest revision wave running from October 2024 through April–May 2026.

Latest FBR Valuation Rate Pakistan 2025–26 City-Wise List

FBR property valuation rate Pakistan have seen a major revision cycle in 2025–26. Key SRO notifications currently in effect include:

  • SRO 2392(I)/2025 December 2025 (Islamabad, later revised)
  • SRO 644(I)/2026 April 16, 2026 (Islamabad revised downward by 10–35%)
  • SRO 650(I)/2026 Multan (amending SRO 1729 of 2024)
  • SRO 651(I)/2026 Faisalabad (amending SRO 1688 of 2024)
  • SRO 652(I)/2026 Bahawalpur (DHA & Askari schemes)
  • SRO 653(I)/2026 Gujranwala (DHA, Askari, Palm City)
  • May 2026 SRO DHA Lahore (officially implemented May 19, 2026)

How to download: Visit fbr.gov.pk → Property Valuation for all city-specific SRO files in PDF format.

Cities Currently Covered by FBR Valuation Rate Pakistan Notifications

# City # City # City
1 Islamabad 2 Lahore 3 Karachi
4 Rawalpindi 5 Faisalabad 6 Multan
7 Peshawar 8 Quetta 9 Hyderabad
10 Sialkot 11 Gujranwala 12 Gujrat
13 Murree 14 Abbottabad 15 Gwadar
16 Bahria Town 17 DHA City Karachi 18 Bahawalpur
19 Jhelum 20 Sargodha 21 Rahim Yar Khan

Plus 35+ additional cities. Total coverage: 56 city/locality links currently listed on FBR’s valuation page.

What Changed in 2025–26? Key Updates 

1. Islamabad Rates A Roller Coaster

Islamabad’s valuation story in 2025–26 has been dramatic:

  • December 2025: FBR tried to hike rates by up to 1,700% in some sectors via SRO 2392(I)/2025
  • December 16, 2025: FBR suspended the SRO after massive protests from real estate associations
  • February 2026: Revised SRO 163(I)/2026 issued with reduced rates (still up 15–75% from before)
  • April 2026: FBR cut rates again by 10–35% via SRO 644(I)/2026

Current Islamabad superstructure rates (SRO 644/2026):

  • Buildings up to 5 years old: Rs. 2,500 per sq. ft
  • Buildings older than 5 years: Rs. 1,200 per sq. ft

In sectors like B-17 and C-14, possession-held residential plots: Rs. 21,000 per sq. yard

2. DHA Lahore May 2026 Revision

DHA Lahore rates were revised downward in May 2026 through an official SRO. DHA Phase 7, Phase 8, and Phase 9 Prism saw noticeable reductions. This is expected to reduce transfer costs and encourage fresh investment activity.

3. Finance Act 2025: Completely New Advance Tax Rates

The Finance Act 2025 replaced the old simple 1%/2%/4% structure with a tiered, value-based system. See the tables in the buyer and seller sections below.

4. CGT The Holding Period Rule Has Changed

This is the biggest change most guides miss. The Finance Act 2024 already introduced a flat CGT rate for properties bought on or after July 1, 2024. The holding period table (10%, 7.5%, 5%, 0%) only applies to properties bought before July 1, 2024. For newer purchases, a flat rate applies. Full details in the seller section below.

FBR Valuation Rate Pakistan by Property Type

FBR valuation rates Pakistan vary by property category and urban zone (typically classified as A-I, I, II, III, etc., with A-I being the highest-value areas).

Property Type Valuation Basis
Open Plot – Residential Per square yard
Open Plot – Commercial Per square yard (significantly higher than residential)
Open Plot – Industrial Per square yard
Built-up Residential Property Per square yard
Built-up Commercial Property Per square yard
Residential Superstructure (constructed building) Per square foot of covered area (age-based)
Flats / Apartments Per square foot of covered area

For Islamabad specifically, the superstructure value is now set at:

  • Up to 5 years old: Rs. 2,500/sq. ft
  • Older than 5 years: Rs. 1,200/sq. ft

For areas with conflicting rates (e.g. overlap between two notifications), the higher value always applies.

Impact on Buyers Taxes You Now Pay (Finance Act 2025 Rates)

Provincial Taxes (Based on DC Rates)

These have not changed structurally, though DC rates themselves are periodically revised:

  • Capital Value Tax (CVT): 2%–3% of DC rates (provincial)
  • Stamp Duty: 2% of DC rates (provincial)
  • Registration Fee: 1% of DC rate or declared value, whichever is higher (provincial)

Federal Advance Tax Section 236-K (Finance Act 2025 Rates)

This is where the biggest change happened. The old flat 2%/4% structure is gone. Rates are now tiered by property value and have three categories instead of two: Filer, Late Filer, and Non-Filer.

Fair Market Value of Property Filer Late Filer Non-Filer
Up to Rs. 50 million 1.5% 4.5% 10.5%
Rs. 50 million to Rs. 100 million 2% 5.5% 14.5%
Above Rs. 100 million 2.5% 6.5% 18.5%

Key point for 2026: Non-filers can now pay up to 18.5% advance tax on high-value property purchases. That’s nearly 12x more than a filer buying the same property. Being on the Active Taxpayers List (ATL) has never mattered more.

Exemptions still apply:

  • Overseas Pakistanis with POC/NICOP using approved banking remittances (see Overseas section)

Impact on Sellers CGT and Advance Tax (Updated 2025–26 Rates)

Advance Tax on Sale Section 236-C (Finance Act 2025 Rates)

Old rate: 1% filer / 2% non-filer. That’s gone. The new structure is:

Gross Sale Consideration Filer Late Filer Non-Filer
Up to Rs. 50 million 4.5% 7.5% 11.5%
Rs. 50 million to Rs. 100 million 5% 8.5% 11.5%
Above Rs. 100 million 5.5% 9.5% 11.5%

Source: FBR.gov.pk official FAQ Finance Act 2025 amendments

Exemptions:

  • Dependents of Shaheed Armed Forces personnel
  • First sale by original allottee (certified by official allotment authority)

Capital Gains Tax (CGT) The Two-Regime System

Pakistan now has two different CGT regimes for immovable property, depending on when the property was acquired.

Regime 1: Properties Acquired On or Before June 30, 2024

For properties acquired on or before June 30, 2024, CGT still depends on the holding period, but the rates are not the same for every property type. Open plots, constructed properties, and flats have separate rate schedules.

Holding Period Open Plots Constructed Property Flats
Up to 1 year 15% 15% 15%
More than 1 year and up to 2 years 12.5% 10% 7.5%
More than 2 years and up to 3 years 10% 7.5% 0%
More than 3 years and up to 4 years 7.5% 5% 0%
More than 4 years and up to 5 years 5% 0% 0%
More than 5 years and up to 6 years 2.5% 0% 0%
More than 6 years 0% 0% 0%

Regime 2: Properties Acquired On or After July 1, 2024

For properties acquired on or after July 1, 2024, the holding-period benefit no longer applies in the same way.

If the seller is on the Active Taxpayers List (ATL) on the date of disposal, CGT is charged at a flat 15% of the capital gain, regardless of whether the property is sold after one year, three years, or a longer period.

If the seller is not on the ATL, the gain is taxed at the applicable rates specified for individuals/AOPs or companies, as the case may be. For individuals and AOPs not appearing on the ATL, the tax rate cannot be less than 15% of the gain.

Plain English: If you bought a property on or after July 1, 2024, you should not assume that holding it for 3+ years will make the gain tax-free. For ATL filers, the current rule is a flat 15% CGT on the gain.

 

Worked Example: Full Buyer + Seller Tax Calculation

Scenario:

  • Property: Residential plot in DHA Lahore
  • Purchase date: September 2024 (post July 1, 2024, new CGT regime applies)
  • Purchase value (FBR rate at time of purchase): Rs. 60 million
  • Sale value (FBR rate at time of sale): Rs. 80 million
  • Holding period: ~1.5 years (sold in early 2026)
  • Both buyer and seller: Active ATL Filers

SELLER’S CALCULATION:

Capital Gain = Rs. 80M – Rs. 60M = Rs. 20 million

CGT (flat 15% new regime, post July 2024 purchase): Rs. 20M × 15% = Rs. 3,000,000

Advance Tax Section 236-C (5% filer Rs. 50M–100M slab): Rs. 80M × 5% = Rs. 4,000,000

Total Seller Tax = Rs. 7,000,000

(Note: 236-C advance tax is adjustable against final tax liability it is not an additional tax on top of CGT in the final assessment)

BUYER’S CALCULATION:

Advance Tax Section 236-K (2% filer Rs. 50M–100M slab): Rs. 80M × 2% = Rs. 1,600,000

Plus provincial taxes on DC rates (stamp duty 2% + registration 1% + CVT ~2.5%): Estimated on DC rate of approx. Rs. 5–8 million = ~Rs. 275,000–440,000

Approximate Total Buyer Tax = ~Rs. 1,875,000 – Rs. 2,040,000

Key takeaway: On an Rs. 80 million property, a filer seller pays approximately Rs. 7 million in total tax. A non-filer seller on the same transaction would pay Rs. 9.2 million (11.5% × Rs. 80M) in 236-C alone, before CGT. Filing your taxes is not optional anymore; the financial penalty for not doing so is enormous.

FBR Valuation Rate Pakistan – What If Your Area Is Not Listed?

Not every locality in Pakistan has an FBR valuation rate Pakistan notification. If your area is not covered:

  • Rule 228 of the Income Tax Rules 2002 provides the legal fallback
  • For open plots: the value determined by the development authority (LDA, KDA, CDA, RDA, etc.) based on auction prices for similar plots applies
  • If no development authority valuation exists: the DC rate (set by District Officer Revenue for stamp duty purposes) is used
  • For agricultural land: the average recorded sale price from revenue records of the estate applies
  • For built-up properties: FMV under Section 68 or DC rate, whichever is higher

In short: DC rates serve as the last resort fallback when FBR has not yet notified rates for your specific area. This is still the situation for many smaller cities and rural localities.

FBR Valuation Rate Pakistan – Overseas Pakistanis Special Exemptions 

The Finance Act 2025 explicitly updated FBR’s position on overseas Pakistanis. Key points:

Advance Tax (236-C and 236-K) Filer Rate for Non-Resident Pakistanis

Overseas Pakistanis who qualify get the filer rate even if they have never filed a tax return in Pakistan. To qualify, you must:

  1. Hold a valid POC (Pakistan Origin Card) or NICOP (National Identity Card for Overseas Pakistanis)
  2. Be non-resident in Pakistan (stay of less than 183 days in a financial year)

How to claim it: The registrar/housing society clicks the “Overseas Pakistanis” link on FBR’s web portal, creates a PSID, uploads your POC/NICOP, and the system processes payment at filer rates after Commissioner verification.

Overseas Pakistanis CGT Treatment on Property Sold in Pakistan

Overseas Pakistanis should not treat this as a blanket “0% CGT exemption.” The law provides a specific treatment only where the conditions are met.

If the seller or transferor is a non-resident individual holding a POC, NICOP, or CNIC, and the immovable property was acquired through a Foreign Currency Value Account (FCVA) or a Non-Resident Pakistani Rupee Value Account (NRVA) maintained with an authorized bank in Pakistan under State Bank foreign exchange regulations, then the tax collected under Section 236C is treated as final discharge of tax liability in lieu of capital gains taxable under Section 37.

In simple terms, eligible overseas Pakistanis may have their Section 236C tax treated as the final settlement of CGT on that property sale. This is not the same as saying “0% CGT applies automatically.”

This treatment is separate from the filer-rate benefit for overseas Pakistanis. Non-resident Pakistanis holding POC or NICOP may qualify for filer rates under Sections 236C and 236K even if they have not filed a Pakistani tax return, subject to FBR’s verification process.

Government Schemes Section 236-K Exemption

Advance tax under Section 236-K does not apply to government-approved schemes specifically for expatriate Pakistanis, provided payment is made in foreign exchange remitted through normal banking channels from outside Pakistan.

FAQs – FBR Valuation Rate Pakistan

What is the FBR valuation rate Pakistan?

The FBR valuation rate Pakistan is the official per-square-yard value set by the Federal Board of Revenue for properties in specific areas. It is the legally binding minimum base for calculating advance tax, CGT, and withholding tax on property transactions. It is set under Section 68 of the Income Tax Ordinance 2001 and published via official SRO notifications.

What is the difference between FBR rate and DC rate in Pakistan?

The FBR valuation rate Pakistan is set by the federal government and used for income tax purposes (advance tax, CGT, withholding tax). The DC rate is set by the provincial government (District Collector / Board of Revenue) and used for provincial taxes like stamp duty, CVT, and registration fees. FBR rates are generally significantly higher than DC rates. You pay both sets of taxes in any property transaction, but they are calculated on different bases.

What are the current advance tax rates for property in Pakistan (2025–26)?

Under Finance Act 2025, buyer advance tax (236-K) ranges from 1.5% to 2.5% for filers, 4.5% to 6.5% for late filers, and 10.5% to 18.5% for non-filers, depending on the property’s FBR value. Seller advance tax (236-C) ranges from 4.5% to 5.5% for filers and 11.5% for non-filers, regardless of property value tier for non-filers.

What is the CGT rate on property in Pakistan in 2025–26?

It depends on when you bought the property. Bought before July 1, 2024: old holding-period system applies (10%/7.5%/5%/0% for 1/2/3/3+ years). Bought on or after July 1, 2024: flat 15% CGT for ATL filers, regardless of holding period. Non-filers face higher progressive rates.

Does the 3-year zero CGT rule still apply in Pakistan?

Only for properties purchased before July 1, 2024. If you bought after that date, there is no zero-CGT benefit for holding 3+ years. A flat 15% CGT applies for ATL filers regardless of holding period under the new regime introduced by the Finance Act 2024.

Where can I check my property’s FBR valuation rate Pakistan?

Visit fbr.gov.pk and go to the Property Valuation section. Each city’s rates are available as downloadable PDFs (SRO notification files). Alternatively, check with a registered property consultant or your housing society’s transfer office, as they handle these filings daily.

What happens if FBR value is higher than the actual market price?

You still pay taxes on the FBR notified rate. Section 68(6) of the Income Tax Ordinance is explicit: the consideration for tax calculation “shall not be less than the fair market value as determined” by FBR. This is exactly why FBR’s Islamabad rate hike in December 2025 (by up to 1,700%) caused such a massive backlash in many sectors; the notified FBR value exceeded the actual market price.

Are overseas Pakistanis exempt from FBR advance tax on property?

Overseas Pakistanis holding POC or NICOP and qualifying as non-residents can pay advance tax at the filer rate even without having filed a Pakistani tax return. They are also exempt from Section 236-K advance tax on government-approved schemes, provided remittance comes through banking channels.

For more information on types of property taxes and real estate investment options, please visit Chakor.

Sources:

CategoriesSpecial Report Construction Economy News Property Taxes Real Estate Real Estate Investment Tax

Pakistan Real Estate Sector Expects Major Tax Relief in Budget FY 2026-27

ISLAMABAD — Pakistan’s real estate and construction sectors are expecting major tax relief in the upcoming federal budget for fiscal year 2026-27, as the government considers proposals to reduce property-related taxes and revive investment activity.

The budget, expected to be presented on June 5, could bring significant changes for property buyers, sellers, investors, and overseas Pakistanis, according to industry representatives and media reports.

Government Signals Possible Relief in Real Estate Taxes

The real estate sector has been under pressure for several years due to higher taxes, rising costs, and a slowdown in property transactions. Industry stakeholders say the sector is directly linked with more than 80 other industries, including cement, steel, paint, glass, electrical fittings, tiles, transport, and construction services.

They argue that when real estate activity slows down, many connected businesses also suffer. For this reason, the sector is urging the government to reduce taxes in the upcoming budget to encourage buying, selling, and construction activity.

Prime Minister Shehbaz Sharif has also reportedly hinted at relief measures for the construction and real estate sectors during meetings with business representatives. These signals have increased expectations that the government may announce major policy changes in the new budget.

Key Tax Demands from the Sector

Real estate stakeholders are demanding reductions in withholding tax, capital gains tax, and rental income tax. They say the current tax structure has discouraged investment and reduced the number of property transactions.

Abolition of Section 7E

One of the sector’s main demands is the abolition of Section 7E of the Income Tax Ordinance. Section 7E imposes tax on deemed income from immovable property. In simple terms, it allows tax to be charged on an assumed income from property, even if the property owner has not actually earned rent from it.

Industry representatives say this discourages documented investors and creates an unfair burden on property owners. They have also called for property-buying and selling taxes to be reduced to 1%.

Business leader Kashif Chaudhry has said that Pakistan’s economy cannot fully recover without restoring activity in the real estate market. He argued that reducing taxes would increase transactions and ultimately help the government collect more revenue.

FBR Proposals Under Consideration

According to reports, the Federal Board of Revenue has prepared proposals to provide relief to the real estate sector. These proposals include reducing taxes on property purchases and sales, while also making investment easier for overseas Pakistanis and local investors.

Under one reported proposal, withholding tax on property purchases for tax filers could be reduced from 1.5 percent to 0.25 percent. Tax on property sales may also be reduced from 4.5 percent to 1.5 percent.

The government has also reportedly briefed the International Monetary Fund on these proposed tax reductions. This is important because Pakistan’s budget decisions are closely linked with IMF targets on revenue collection and fiscal discipline.

FPCCI Calls for Wider Reform

The Federation of Pakistan Chambers of Commerce and Industry has also supported tax relief for the real estate and construction sectors. FPCCI President Atif Ikram Sheikh has said that taxes imposed under Sections 236C and 236K are expected to be abolished.

He has also called for the removal of Section 7E, describing it as a long-standing demand of the business community.

The FPCCI has further proposed the creation of a Real Estate Regulatory Authority, known as RERA, in Pakistan. The chamber says such an authority would help regulate the sector, improve transparency, and protect investors.

In its shadow budget proposals, FPCCI has suggested reducing real estate taxes to a uniform 0.5 percent. The chamber believes this would encourage investment and help revive economic activity.

Experts Urge Balanced Policy

Tax experts and economists say the government should reduce taxes that discourage transactions, but they also warn that reforms must be carefully designed.

Experts Huzaima Bukhari, Dr. Ikramul Haq, and Abdul Rauf Shakoori have argued that Pakistan’s tax system needs broader reform. They say the country should reduce pressure on productive economic activity while improving taxation of idle and speculative assets.

Their view is that transaction taxes should be rationalized, but the government should also modernize land records, improve property valuation systems, and tax speculative urban land more effectively.

Other analysts have warned that Pakistan’s room for tax relief may be limited because of IMF conditions. If the government reduces taxes in one area, it may need to raise revenue from another area to meet fiscal targets.

Overseas Pakistanis Seen as Key Investors

The proposed relief is also being viewed as important for overseas Pakistanis. Industry representatives say lower taxes and simpler procedures could encourage Pakistanis living abroad to invest more in property and construction projects.

They believe this could bring more foreign exchange into the country through remittances and investment. For Pakistan, where remittances play an important role in supporting the economy, this could be a major benefit.

FPCCI Senior Vice President Saqib Fayyaz Magoon has also said that real estate can help attract more foreign exchange if investors are given confidence and clear rules.

Revenue Challenge for the Government

The government faces a difficult policy choice. On one hand, lower taxes may increase property transactions and revive economic activity. On the other hand, the government must also meet revenue targets and satisfy IMF conditions.

FBR data shows that withholding tax collection increased during the current fiscal year. However, higher taxes have also contributed to a decline in capital gains tax collection compared to the previous year. This shows that while higher rates may increase some tax collections, they can also reduce overall market activity.

Real estate stakeholders argue that lower rates could bring more people into the documented economy and increase tax collection through higher transaction volume.

Budget Could Mark Turning Point

The upcoming budget is being closely watched by builders, developers, property buyers, sellers, and overseas investors. If the government accepts key proposals, the real estate sector could receive one of its biggest relief packages in recent years.

However, experts say tax cuts alone will not be enough. They believe the government must also improve regulation, digitize land records, update property valuation systems, and discourage speculative investment in idle land.

For now, the sector is waiting for the June 5 budget announcement. The final decision will show whether the government is ready to make a major policy shift for real estate and construction, or whether fiscal pressure will limit the scale of relief.

References

Bukhari, H., Haq, I., & Shakoori, A. R. (2026, May 15). Budget 2026–27 & fiscal justice. Business Recorder. https://www.brecorder.com/news/40421212

Bukhari, H., Haq, I., & Shakoori, A. R. (2026). Budget FY27: Out of the box solutions. Business Recorder. https://www.brecorder.com/news/amp/40422269

Federation of Pakistan Chambers of Commerce and Industry (FPCCI). (n.d.). Section 7E of Income Tax Ordinance should be abolished: Atif Ikram Sheikh. FPCCI Official Website. https://fpcci.org.pk/section-7e-of-income-tax-ordinance-should-be-abolished-atif-ikram-sheikh/

Khan, Z. A. (2026, June 1). Real estate sector seeks major tax relief in the budget. SAMAA TV. https://www.samaa.tv/2087351329-real-estate-sector-seeks-major-tax-relief-in-budget

Khyber News. (2026, June 1). Pakistan Federal Budget 2026-27 analysis raises questions over inflation, taxes, and IMF influence. Khyber News. https://khybernews.tv/pakistan-federal-budget-2026-27-analysis-raises-questions-over-inflation-taxes-and-imf-influence/

Pakistan Observer. (2026, June 1). Budget 2026–27: Big relief expected for property buyers, sellers in Pakistan. Pakistan Observer. https://pakobserver.net/budget-2026-27-big-relief-expected-for-property-buyers-sellers-in-pakistan/

Pakistan Observer. (2026). FPCCI unveils Pakistan’s first shadow budget for 2026-27. Pakistan Observer. https://pakobserver.net/fpcci-unveils-paks-first-shadow-budget-for-2026-27/

Siddiqui, S. (2026, June 1). Major tax relief expected for real estate in Budget 26-27. Bloom Pakistan. https://bloompakistan.com/major-tax-relief-expected-for-real-estate-in-budget-26-27/

Talreja, S. (2025, June 11). In Pakistan targets passive incomes, foreign e-commerce in a push for a $50 billion tax haul. Arab News. https://www.arabnews.com/node/2604103/amp

TechJuice. (2026, June 1). Major property tax relief likely in Pakistan Budget 2026-27. TechJuice. https://www.techjuice.pk/major-property-tax-relief-likely-in-pakistan-budget-2026-27/

For more news on real estate and Special Reports, visit Chakor Ventures.

CategoriesReal Estate Investment News Property Property Taxes Real Estate

FBR Revises Property Valuations for DHA Lahore and Rawalpindi; Eight Cities Now Covered Under Updated Tax Framework

ISLAMABAD — The Federal Board of Revenue has updated the official valuations of properties in Defence Housing Authority areas of Lahore and Rawalpindi, through two separate orders issued on Tuesday. The revisions will directly affect the amount of tax that buyers and sellers are required to pay when a property changes hands in these localities.

The updates were formalised through Statutory Regulatory Orders S.R.O. 876(I)/2026 for Lahore and S.R.O. 877(I)/2026 for Rawalpindi, both signed by Muhammad Amin Qureshi, Secretary Rules and SRO, Revenue Division. They amend valuations originally set in October 2024 and bring the total number of cities where the FBR has revised property benchmarks in recent months to eight, following similar exercises carried out for Islamabad and other major urban centres.

Understanding the FBR Rate

When a property is sold in Pakistan, the government uses an official benchmark value set by the FBR to calculate withholding tax, which is a tax collected at the point of the transaction. This FBR rate is separate from both the actual price agreed between buyer and seller and the Deputy Commissioner rate set by provincial governments for stamp duty purposes.

The purpose of periodically revising these benchmarks is to keep them closer to real market values. When official values are too far below what properties actually trade for, the withholding tax collected ends up being lower than it should be, effectively allowing significant portions of high-value transactions to go under-taxed. There are multiple online property tax calculators which help you calculate your property taxes.

Lahore: What the New Rates Say

The Lahore order revises valuations for DHA Phases VI through XIII, all administratively located within Nishtar Town. Rates here are expressed in rupees per marla, the standard unit of land measurement in Punjab.

The most valuable commercial address in the entire Lahore table is the Broadway strip in DHA Phase VIII, the main commercial avenue running through sub-sectors A, B, C and D, officially valued at Rs. 4,988,970 per marla. This figure forms the basis of withholding tax calculations for any commercial plot or shop sold along that stretch.

Among residential areas, DHA Phase XI Rahbar, Sector I carries the highest valuation at Rs. 967,960 per marla, reflecting its established infrastructure and sustained demand. At the lower end, DHA Phase XIII, formerly known as DHA City and located furthest from the city centre, is valued at Rs. 204,960 per marla, consistent with its earlier stage of development.

DHA Phase VI, one of Lahore’s most established residential addresses, is valued at Rs. 1,132,460 per marla for most residential blocks. The C, M and N Blocks carry a lower residential rate of Rs. 761,460 per marla, though their commercial land value rises sharply to Rs. 4,369,410 per marla, reflecting heavy commercial activity in those areas.

A significant addition in this notification is the first-ever official valuation assigned to One Central DHA, a newer development that previously had no FBR benchmark. It has now been entered into the official table at Rs. 760,000 per marla for residential open plots and Rs. 3,100,000 per marla for commercial plots. This means transactions in One Central DHA will now carry a formally calculated withholding tax obligation for the first time.

Across all DHA Lahore entries, built structures, that is, houses or commercial buildings as opposed to bare land, are assessed at a uniform Rs. 1,750 per square foot for residential and Rs. 2,800 per square foot for commercial, regardless of which phase they are located in.

Rawalpindi: A Different Scale, Similar Intent

The Rawalpindi order covers DHA Phases I through V and DHA Valley. An important distinction: unlike Lahore, where rates are expressed per marla, Rawalpindi valuations in this notification are given in rupees per square foot. This reflects a difference in how property is traditionally measured and administered across the two cities.

The highest commercial valuation in Rawalpindi’s table belongs to DHA Phase II, at Rs. 17,677 per square foot for commercial open plots, the single largest figure in the Rawalpindi notification. DHA Phase I follows at Rs. 15,427 per square foot for commercial land.

On the residential side, DHA Phase II again leads at Rs. 2,878 per square foot, while DHA Valley, the most peripheral of the listed localities, sits at just Rs. 466 per square foot for residential open plots. The gap between these two figures illustrates how sharply official land values decline as the distance from the city’s established core increases.

DHA Phases II Extension, III and IV share an identical commercial open plot rate of Rs. 5,946 per square foot, indicating that the FBR considers their commercial potential broadly equivalent. Their residential rates, however, vary: Phase IV at Rs. 1,322 per square foot, Phase III at Rs. 1,011 per square foot and Phase II Extension at Rs. 778 per square foot, differences that broadly reflect each area’s level of development and infrastructure maturity.

Built structure rates across Rawalpindi DHA phases are set at Rs. 1,470 per square foot for commercial and Rs. 735 per square foot for residential in most phases, with DHA Valley’s residential superstructure rate marginally higher at Rs. 770 per square foot.

The Broader Context

Pakistan’s property market has long operated with a well-documented gap between declared transaction values and actual market prices. For years, it was common practice for buyers and sellers to register a property at a fraction of its true value, reducing their tax liability significantly.

FBR valuation revisions are one of the primary tools available to narrow that gap and, with it, improve tax collection from a sector that has historically contributed far less to the national treasury than its scale would suggest.

These revisions also carry relevance beyond individual transactions. Pakistan’s economic reform commitments, including those made under its ongoing programme with the International Monetary Fund, have consistently identified the real estate sector as an area requiring greater documentation and tax compliance. The gradual extension of revised FBR benchmarks to more cities and localities is part of the government’s response to those obligations.

For buyers and sellers in the affected DHA areas, the immediate effect is straightforward: withholding tax at the point of transaction will now be calculated on a revised official value, which in most cases will be closer to actual market prices than the figures it replaces.

Those accustomed to a significant gap between the FBR rate and the market price should account for a narrower margin when planning the financial aspects of a property transaction.

For more news on real estate and Special Reports, visit Chakor Ventures.

References

Federal Board of Revenue, Government of Pakistan. (2026, May 19). S.R.O. 876(I)/2026: Revision of valuation of immovable properties Nishtar Town, Lahore [Statutory notification]. Revenue Division, Islamabad. File No. 2(17)R&S/2017.

Federal Board of Revenue, Government of Pakistan. (2026, May 19). S.R.O. 877(I)/2026: Revision of valuation of immovable properties Rawalpindi [Statutory notification]. Revenue Division, Islamabad. File No. 2(31)R&S/2024.

Akhter, S. (2026, May 19). FBR revises property valuation tables for Nishtar Town Lahore. Pkrevenue.com. https://pkrevenue.com/fbr-revises-property-valuation-tables-for-nishtar-town-lahore/

Government of Pakistan. (2001). Income Tax Ordinance, 2001 (XLIX of 2001), Section 68(4). National Assembly of Pakistan.

Federal Board of Revenue, Government of Pakistan. (2024, October 29). S.R.O. 1722(I)/2024: Valuation of immovable properties Lahore [Statutory notification]. Revenue Division, Islamabad.

Federal Board of Revenue, Government of Pakistan. (2024, October 29). S.R.O. 1728(I)/2024: Valuation of immovable properties Rawalpindi [Statutory notification]. Revenue Division, Islamabad.

CategoriesNews Budget Economy Property Property Taxes Real Estate Real Estate Investment

FPCCI seeks property tax relief to revive real estate, construction sectors

ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed major property tax reforms for the federal budget FY2026-27 to help revive Pakistan’s real estate and construction sectors.

According to FPCCI’s budget proposals, the current tax structure has made property transactions more expensive and slowed investment in the sector. The chamber has suggested reducing withholding tax under Section 236C on the sale of immovable property to a uniform 1% across all transaction values. At present, the rate can go as high as 5.5% on higher-value transactions and is charged on the gross transaction value, regardless of actual profit or loss.

FPCCI also proposed reducing advance tax under Section 236K on property purchases to a flat 1%, while abolishing advance tax on the first property purchase by a filer. The body said simpler and lower tax rates could encourage proper documentation, reduce under-reporting, and improve transparency in the property market.

The chamber further called for abolishing the tax on deemed income under Section 7E, saying it taxes assumed income from immovable property instead of actual earnings. It also recommended withdrawing Section 7F, under which builders and developers are taxed on 10% of gross receipts, regardless of their actual income.

FPCCI said balanced taxation could attract investment and support allied industries such as cement, steel, transport, and labour, helping generate wider economic activity.

For more news on real estate and special reports, visit Chakor Ventures.

Sources: