ISLAMABAD — The Federal Board of Revenue (FBR) has introduced a revised tax structure for property transactions in the current fiscal year, significantly increasing the withholding tax rates on sellers compared to buyers, reports have claimed.
New Slabs
Filers selling property are now subject to a minimum withholding tax of 4.5 percent, while for properties valued above Rs100 million, the rate has been raised to 5.5%.
For non-filers, the burden is substantially higher, with an 11.5% withholding tax on property sales exceeding Rs100 million.
On the buyer’s side, the new rates are comparatively lower. Filers purchasing property worth up to Rs50 million are charged a 2.5% withholding tax, while properties priced above Rs100 million now incur a 6.5% tax.
However, non-filers face significantly steeper rates, ranging from 10.5% to a maximum of 18.5% depending on the property value.
The move marks a shift in FBR’s approach, placing greater tax responsibility on property sellers, particularly those who are not on the tax rolls. This policy aims to enhance tax compliance and increase revenue from the booming real estate sector.
The Revenue Department continues to collect these withholding taxes during the transfer of property ownership, subsequently transferring the funds to FBR.
The updated tax regime reflects the government’s ongoing efforts to broaden the tax base and discourage undocumented property transactions.
