Budget 2025–26: Experts Recommend Reducing Taxes on Property Transactions
With the federal budget 2025–26 set to be announced on June 10, the government is reviewing suggestions from various sectors. One of the key areas under discussion is the property market, where economic experts have proposed major tax changes.
What Are the Experts Suggesting?
An economic think tank, Economic Policy and Business Development, has submitted proposals aimed at boosting the real estate sector. The main focus is to reduce the heavy tax burden on buying and selling property.
Suggested Tax Reductions
Currently, property transaction taxes are between 3% to 4%, but experts suggest:
- Reducing the sales (selling) tax to 1.5%–2%
- Completely removing the tax on property purchases
- Bringing the overall property tax burden down from 11% to around 2%–2.5%
Proposals for the Construction Sector
The think tank also recommends:
- Ending sales and advisory taxes on the construction sector
- Simplifying real estate rules, especially under Section 7E
- Reactivating Section 9A of the second schedule
- Strengthening the Pakistan Real Estate Regulatory Authority (PRERA)
Goal: Keep Investment in Pakistan
Experts believe that if the property sector becomes more affordable and business-friendly, it will help prevent capital from flowing abroad and encourage local investment instead — a move that can support the national economy.
Summary
As part of Budget 2025–26 planning, economic experts have advised the government to reduce or eliminate several property-related taxes. These steps aim to revive the real estate sector, attract local investment, and ease the financial load on buyers and sellers.
