ISLAMABAD – Budget 2025 brings new update for property owners as there will be no more tax if you have lived in your house for 15 years.
The federal government ended withholding tax on immovable properties owned and occupied by individuals for 15 years or more in relief for long-term homeowners, as the change was introduced in amended Finance Bill 2025–26, which brings wide range of reforms to Pakistan’s tax framework, effective July 1, 2025.
The apex tax collection agency FBR incorporated these changes to ease tax burden on residents who have lived in the same property for over a decade and a half. The revised Bill further adds key measures to protect taxpayer rights. All Senate-proposed recommendations related to procedural safeguards before arresting individuals in tax fraud cases have been fully adopted.
These changes are designed to ensure transparency and due process in tax enforcement. Finance Bill restructures existing sales tax framework in response to Supreme Court’s judgment in Taj Company case. The revisions focus on regulating how arrests and First Information Reports (FIRs) are handled in tax-related criminal matters.
The amended bill introduces Energy Vehicles Adoption Levy Act 2025, which will apply to all manufacturers, assemblers, suppliers, and importers of internal combustion engine (ICE) vehicles and there is growing pressure to exempt hybrid vehicles from this levy.
Property Taxes in Pakistan 2025
| Tax Type | Applicability | Rate |
|---|---|---|
| Capital Value Tax (CVT) | All immovable property | 2% of Fair Market Value annually |
| Deemed Rental Income (Sec 7E) | Property FMV exceeding 25 million | 5% of FMV taxed at 20% annually |
| Rental Income Tax | Rental income earned | 0%–50% (slab-based and depends on filer status) |
| Urban Immovable Property Tax | Owned urban properties | Levied by provincial governments; rates vary |
| Agricultural Income Tax | Agricultural land | Provincial tax; exemptions: Punjab (400,000), Sindh/KPK (600,000) |
Selling Property
| Tax Type | Criteria | Rate / Details |
|---|---|---|
| Capital Gains Tax (CGT) | Profit from sale | Before July 1, 2024: 15% reducing to 0% over 6 years; After: Flat 15% |
| Advance Tax on Sale (236C) | On sale transaction | Filer: 3–4%, Late Filer: 6–8%, Non-Filer: 10% depending on property value |
Buying Property
| Tax Type | Criteria | Rate / Details |
|---|---|---|
| Advance Tax on Purchase (236K) | On buying property | Filer: 3–4%, Late Filer: 6–8%, Non-Filer: 12–20% depending on property value |
| Bank Channel Requirement (75A) | For payments exceeding PKR 5 million | Must be through bank transfer |
Tax relief for real estate sector in budget 2025-26 [WHT, FED and Stamp Duty]
