In the recent budget of 2025 to 2026, the tax on the purchase of property was reduced. Not just this, it was also proposed that the 7% FED on commercial property must be abolished. However, in the recent news, the amendment in the Finance Bill 2025 to 2026 has been made that will be effective from July 1, 2025. Let’s have a look at it and see if it is going to help people in any way or not.
Withholding Tax on Immovable Property Abolished
According to the amended Finance Bill 2025 to 2026 in Pakistan, it is announced that the tax on selling immovable property has been removed. But this is not just it, the property must have been in personal use for almost 15 years or more. This amendment in the bill is made on the recommendation of the National Assembly Standing Committee on Finance. However, this abolishment of the tax is going to help those thinking of selling their long-term owned property in Pakistan.
Other than removing the tax on the immovable property, the amended finance bill 2025 to 2026 has also decided to abolish the FED on property transfers. Since it was proposed already, a 3% federal excise duty on the transfer of property has been removed.
However, this FED was introduced in the 2024 to 2025 budget, which applied to the first transfer or purchase of the property. Considering this, the FED rates previously were 3% for filers, 5% for non-filers, and 7% for non-filers.
Conclusion
It was announced that the tax on immovable property was abolished, and the 3% FED was removed on property transfer. These are two important amendments made in the Finance Bill. However, it is important to note that this abolished tax will benefit those who are willing to sell their property after owning it for a longer period of time.
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