Federal Excise Duty on Property Transactions to Be Removed?

Great news for the real estate sector in Pakistan: the federal excise duty on property transactions is to be removed. As per the reports, Prime Minister Shahbaz Sharif has already approved the removal of this duty, and a summary has already been sent to the federal cabinet by FBR.

The government of Pakistan imposed a 3% FED on the filers, 5% on the late filers, and 7% on the non-filers in the Finance Act 2024, which resulted in slowing down the property transactions and the overall real estate market. 

Now, the government is considering two main options in this regard: a presidential ordinance or presenting a bill in the parliament to formalize the abolition. The second option is most likely to be chosen for the immediate removal, as suggested by the various media outlets.

Moreover, the withdrawal of Computerized Payment Receipt (CPR-FE) is also on the cards. It is used to collect the FED on the allotment or transfer of commercial properties, and even the first transfer or allotment of residential plots. 

But why is this happening? It’s likely due to the revenue targets not being met after the imposition of these duties, which slowed down the property market. With this expected abolition, the burden on the developers and buyers will be lightened, and it is intended to boost the property market in Pakistan.